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Law Library 

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No ^ I 7 'If 



- No. - 3 iga 



United States V-J^^^ 

COURT OF APPEALS 

for the Ninth Circuit 

LEO L. PHILLIPS, j[L) i^^ ,^,„,^^^ 



P. R. ENLOE, ^ 1\ F //^ 

V Appellant, 

V. 

FLOYD OSBORNE, HARLEY RAY, 
R. C. MacDONALD, E. A. REED, ARCHIE 
ANDERSON, JAMES V. NEUBAUER, JOHN DOE, 
RICHARD ROE and others. 

Defendants- Appellees. 



On Appeal from the United States District Court 

for the Western District of Washington, 

Southern Division 



BRIEF OF APPELLANT P. R. ENLOE 



DON S. WILLNER 

WILLNER, BENNETT & LEONARD 

900 Corbett Building 
Portland, Oregon 97204 
Attorney for Appellant 



P)v-eP 



STEVENS-NESS LAW PUB. CO. "^^S^ PORTUAND, ORE. 



•; \<m 






TOPICAL INDEX 

Page 

Jurisdiction 1 

Statement of the Case 2 

Statement of Facts 2 

Specification of Error 5 

Question Presented 6 

Summary of Argument 6 

Argument 6 

The Court Erred in Entering an Order of Per- 
manent Injunction Against Enloe 6 

Conclusion 8 

TABLE OF AUTHORITIES 

Cases Cited 

International Brotherhood of Pulp, Sulphite and 
Paper Mill Workers, AFL-CIO, et al. v. De- 
laney, et al, — W. — , 442 P.2d 250 (1968) _._ 7 

Phillips V. Osborne, 403 F.2d 826 (9th Cir., 1968) 

2,8 



Statutes 

28 U.S.C. 11 2 

29 U.S.C. 413 6 



Digitized by the Internet Arciiive 

in 2010 with funding from 

Public.Resource.Org and Law.Gov 



http://www.archive.org/details/govuscourtsca9briefs3505 



No. 3180 



United States 

COURT OF APPEALS 

for the Ninth Circuit 



LEO L. PHILLIPS, 

Plaintiff, 
P. R. ENLOE, 

Appellant, 

V. 

FLOYD OSBORNE, HARLEY RAY, 
R. C. MacDONALD, E. A. REED, ARCHIE 
ANDERSON, JAMES V. NEUBAUER, JOHN DOE, 
RICHARD ROE and others, 

Defendants-Appellees. 



On Appeal from the United States District Court 

for the Western Distnct of Washington, 

Southern Division 



BRIEF OF APPELLANT P. R. ENLOE 



JURISDICTION 

Appellant P. R. Enloe is unable to advise this 
Court of the basis upon which the United States Dis- 
trict Court for the Western District of Washington, 
Southern Division, granted an injunction to enjoin 
this appellant, who was not a party to any proceed- 



ings before that court, from continuing with a suit in 
the Superior Court of Cowlitz County, Washington. 

This Court has jurisdiction of this appeal from 
the order of permanent injunction under 28 U.S.C. 11. 

STATEMENT OF THE CASE 

In Phillips V. Osborne, 403 F.2d 826 (9th Cir., 
1968), this Court held that Leo Phillips had no stand- 
ing in Federal Court under the Landrum-Griffin Act 
to sue for the recoveiy of certain funds transferred 
from a local union. P. R. Enloe then sued in state 
court for the recoveiy of same funds under the com- 
mon law of contracts of the State of Washington. The 
Federal Court enjoined Enloe from continuing with 
the state court suit. This appeal seeks to vacate the 
injunction because the earlier case was decided on the 
issue of the standing of the plaintiff and never 
reached the merits of the ownership of the local union 
funds. 

STATEMENT OF FACTS 

On February 24, 1964, Local 580 was affiliated 
with the International Brotherhood of Pulp, Sulphite 
& Paper Mill Workers, AFL-CIO, hereinafter called 
International, and represented the employees of the 
Weyerhaeuser Pulp Mill in Longview, Washington 
(Finding of Fact 1). The Bylaws of the local union 
provided : 

"Disbursement of Funds. Local funds may be 
disbursed only by first being authorized by the 
members voting at a regular meeting or at a spe- 



cial meeting. All checks are to be signed by the 
treasurer and co-signed by the president or vice- 
president." (Art XV, Ex. 2). 

On September 24, 1964, the defendants, five of the 
officers of the local, transferred $40,000 of the assets 
of the local out of the control of the local into an es- 
crow. This action had not been authorized by the 
members at a regular or special meeting (Finding of 
Facts). 

On September 26, 1964, Local 580 passed two mo- 
tions : 

1. "This local does not ratify the action taken 
by the officers without the knowledge of the local 
and return the money." (Finding of Fact 4) 

2. "That all money of Local 580, with the ex- 
ception of $500.00 for operating expenses, be di- 
vided equally among the paid up members of Lo- 
cal 580 as of 'today' and checks be written imme- 
diately." (Finding of Fact 4). 

The defendants refused to return the money to the 
local. Later that morning. Local 580 disaffiliated from 
the International and affiliated with a new union, the 
Association of Western Pulp and Paper Workers 
(Finding of Fact 5). 

Leo Phillips, a supporter of the AWPPW, brought 
suit in the United States District Court for the West- 
ern District of Washington, Southern Division, on 
October 13, 1964 to require that the decisions of the 
local union regarding funds be carried out. The Dis- 
trict Court dismissed the complaint of Phillips, con- 
cluding that: 



"In the particular circumstances of this case, 
a reasonable time within which Plaintiff was re- 
quired to file his action expired upon the conclu- 
sion of the disaffiliation meeting on September 
26, 1964. Since this action was not filed until 
October 13, 1964, it was not filed within a rea- 
sonable time as required by Section 501 of the 
Act." (Conclusion of Law 11). 

"While Phillii3s was a member of Interna- 
tional Local 580 at the first meeting on Septem- 
ber 26, 1964, by reason of his actions during the 
following meetings that day, he was not a mem- 
ber of the International Local 580 within the 
meaning of Section 501(b) at the end of that 
day. Hence, Plaintiff Phillips has no standing to 
bring this suit." (Emphasis added). (Conclusion 
of Law 13). 

This Court then affirmed the District Court, stat- 
ing: 

1. "In the light of Phillips' relation with 
Western, other considerations lead us to agree 
that he, at the time of filing his suit, was not a 
'member' of International within the meaning of 
Section 501(b)." Phillips v. Oshome, 403 F.2d 
826,831 (9th Cir., 1968). 

2. "In requesting direct relief for certain un- 
ion members only and not 'for the benefit of the 
labor organization,' Phillips disqualified himself 
from proceeding under Section 501." (403 F.2d 
at 832). 

3. "Hence, statutes extending federal jurisdic- 
tion, such as Section 501(b), are narrowly con- 
strued so as not to reach beyond the limits in- 



tended by Congress, [citations] . . . Such a con- 
struction is especially appropriate when, as here, 
the statute generally concerns rights subject to 
full and satisfactory vindication in state courts" 
(Emphasis added). (403 F.2d at 828). 

4. ^^The appellant has failed to explain why 
a state court may not satisfactorily determine the 
ownership of the funds involved in the present 
controversy.'^ (Emphasis added). (403 F.2d at 
828). 

Following the suggestion of this Court, P. R. En- 
loe then filed suit in the Superior Court of Cov/litz 
County against the same defendants sued in the Fed- 
eral Court case. Enloe's action was based on a viola- 
tion by the defendants of their contract with the oth- 
er union members under the common law of the State 
of Washington by transferring the $40,000 in viola- 
tion of the Bylaws of the local union (R. p. 4). De- 
fendants brought a supplemental motion and affidavit 
in the Federal Court seeking to enjoin Enloe, who 
was not a party to the Federal action, for seeking 
relief in the state court (R. p. 1). 

On Februaiy 10, 1969 the District Court entered 
an order of permanent injunction against Enloe and 
this appeal followed (R. p. 25). 

SPECIFICATION OF ERROR 

The Court erred in entering an order of perma- 
nent injunction preventing Enloe from seeking relief 
in state Court. 



6 



QUESTION PRESENTED 

Does the decision of this Court that Phillips had 
no standing to bring a suit under the Landrum- 
Griffin Act to recover certain funds prevent Enloe 
from seeking to recover the same funds under the 
common law of contracts of the State of Washington? 

SUMMARY OF ARGUMENT 

This Court has ruled that Phillips was not a 
proper plaintiff under the Landrum-Griffin Act. The 
opinion of this Court stated 'The appellant has failed 
to explain why a state court may not satisfactorily 
determine the ownership of the funds involved in the 
present controversy." 

This Court thereby invited the filing of a case in 
state court "to determine the ownership of the funds 
involved in the present controversy." By enjoining 
Enloe from seeking relief in state court, the District 
Court confused a lack of standing of Phillips with a 
decision on the merits of the ownership of the funds. 

ARGUMENT 

The Court Erred in Entering an Order of Permanent 
Injunction Against Enloe. 

The Landrum-Griffin Act is designed to add to 
the rights available to union members and not to re- 
place any rights available under state law. 29 U.S.C. 
413. This Court has previously held that Leo Phillips 



was the wrong plaintiff to bring a suit under the 
Landrum-Griffin Act to compel defendants to return 
to the local union the $40,000 that they unquestion- 
ably transferred contrary to local union bylaws. The 
decision of this Court means that neither Phillips nor 
anyone else who supported the disaffiliation of Local 
580 from the IBPSPMW on September 26, 1964 can 
bring suit under the Landrum-Griffin Act, 

Neither the District Court nor this Court reached 
any decision determining the ownership of the funds 
involved in the controversy. It remains to be deter- 
mined whether the defendants had a right to transfer 
the $40,000 in violation of the local union Bylaws. If 
their action was wrongful it remains to be determined 
whether the motions of the local union concerning the 
disposition of this money can be carried out. These 
are the merits of the controversy which were not 
reached in Federal Court since the plaintiff Leo Phil- 
lips in the Federal case had no standing. The question 
of the ownership of the funds can and should be 
reached in the pending case in the Superior Court of 
Cowlitz County as soon as this Court removes the 
injunction which prevents that case from proceeding. 

In addition to the $40,000 involved in this case 
Local 580 IBPSPMW had certain office equipment 
and furniture. In the case of International Brother- 
hood of Pulp, Sulphite and Paper Mill Workers, AFL- 
CIO, et al V. Delaney, et al, — W — , 442 P2d 250 
(1968), the International Union and Local 580 IBPS- 
PMW sued to recover the office equipment and furni- 



8 

ture from the disaffiliating local 580 and also to for- 
feit the assets of the disaffiliating local 153, which 
represented the employees of the Longview Fibre mill 
in Longview, Washington. The Supreme Court of the 
State of Washington, by a unanimous en banc deci- 
sion, dismissed that case. The result is that the office 
equipment and furniture of Local 580 are now in the 
hands of Local 580 in its new affiliation with AWP- 
PW. Meanwhile, the $40,000 from the treasury of Lo- 
cal 580 is still in the hands of five individuals who 
transferred it contrary to the local union Bylaws al- 
most five years ago. 

Appellant Enloe is not seeking to relitigate any is- 
sue that was decided in the case of Phillips v. Osborne. 
He only asks that the specific language of this Court 
in its earlier opinion be carried out so that, as sug- 
gested by this Court, a state court may "satisfactorily 
detennine the ownership of the funds involved in the 
present controversy." 

CONCLUSION 

The order of permanent injunction preventing P. 
R. Enloe from seeking relief in the Superior Court 
of Cowlitz County, Washington, should be vacated. 

Respectfully submitted, 

WiLLNER, Bennett & Leonard 
Don S. Willner 
Attorneys for Appellant P. R. Enloe 



NOo 22208 / 



IN THE 



UNITED STATES COURT OF APPEALS 



FOR THE NINTH CIRCUIT 




jun 1 1 ms 



EDOCO TECHNICAL PRODUCTS, INC., 



VS 



PETER KIEWIT SONS' CO., and 
THE B. F, GOODRICH COMPANY, 



Plaintiff-Appellant , 



Defendants -Appellees 



PETITION FOR REHEARING AND 
SUGGESTION FOR REHEARING IN BANC 
FILED BY PETITIONER 
EDOCO TECHNICAL PRODUCTS, INC. 



FULWTDER PATTON RIEBER LEE & UTECHT 

FRANCIS A. UTECHT 

920 Fidelity Federal Plaza 
555 East Ocean Boulevard 
Long Beach, California 90802 

Attorneys for Petitioner 



FILED 

JUN101969 



4 



SUGGESTION FOR REHEARING IN BANC 

Pursuant to Rule 35(b) Federal Rules of Appellant 
Procedure petitioner suggests the appropriateness of re- 
hearing this matter in banc. A reversal of the deicision of 
May 28, 1969 is necessary to maintain uniformity with the 
decision of this Court in In ternational Manuf actmn na_rn__^ 
Landon^ 336 F.2d 723 (August, 1964). m International this 
Court held that in a patent infringement case a file wrapper 
estoppel requires that the narrowed patent claim element goes 
to the heart of the invention. It will be apprent from the 
accompanying petition for rehearing that the panel of this 
Court that heard this matter failed to apply this doctrine. 



PLAINTIFF-APPELLANT'S PETITION FOR REHEARING 

The panel of this Court in rendering its decision of 
May 28, 1969 made a clear and simple mistake of fact of such 
magnitude that the panel could not help but err in applying the 
law regarding file wrapper estopel. 

The panel's mistake of fact appears at the very be- 
ginning of its decision of May 28, 1969 and is embodied in the 
following language: 

"The patented device relates to paving 
and is designed to control the cracking of 
pavement as it contracts on drying and to 
seal the cracks against the seepage of 
water. The device is a relilient strip 
that is, along the desired line of fracture, 
embedded in the pavement while it is being 
poured. In its cross section it is cruci- 
form, the vertical arms tapering from the 
center to top and bottom and the horizontal 
arms being serrated. The top vertical arm 
provides a continuing band running close 
below the pavement surface which causes 
fracturing in alignment with it. The hori- 
zontal arms provide water stops so that 
water seeping through the fracture cannot 
penetrate to work erosion beneath the pave- 
ment. The serrations serve to anchor the 
strip to the cement on either side." 



As indicated by the above language the panel con- 
sidered the patented invention to be the plastic strip per se 
In fact, however, the patented invention is not the strip per 
se, but is a weakened plane joint in a paving section. This 
fact becomes immediately apparent from patent Claim 1, since 
it is axiomatic that the invention of a patent is set forth 
in its claims. 

"Claim 1. In a paving section, a 
weakened plane joint, comprising: an 
elongated vertically extending paving 
fracturing band of lesser height than the 
depth of said paving section, said band 
having its upper portion tapering upwardly 
for a distance greater than the thickness 
of said band to provide a continuous 
straight edge below the upper surface of 
said paving section, said band having its 
lov;er portion tapering downwardly for a 
distance greater than the thickness of 
said band to provide a continuous straight 
edge disposed above the lower surface of 
said paving section whereby said paving 
section undergoes fracturing in vertical 
alignment with the upper and lower edges 
of said band as said paving cures so as 
to define said weakened plane joint across 
said paving section; and a horizontally 
extending sealing strip integrally 



connected to each side of said band, 
said strips each being formed with longi- 
tudinally extending serration means that 
are firmly embedded within said paving as 
said paving cures, said sealing strips co- 
operating with the paving section on either 
side of said weakened plane joint to res- 
strain the downv^7ard flow of water through 
said joint, said paving fracturing band 
and said sealing strips being formed of 
resilient material whereby relative move- 
ment is permitted between the portions of 
said paving section on either side of 
said weakened plane joint." 

The invention as recited in Claim 1 is shown at 
Page 6 of Plaintiff -Appellant ' s Opening Brief reproduced imme- 
diately herebelow: 






/ 







cro//s/r 






Taking the above drav/ing in conjunction with Claim 
1 it will be apparent that the plastic strip (or band) per se 
is a complete nullity outside the completed weakened plane 
paving joint! Indeed, plastic strips used in paving joints 
having the same general shape of the plastic strip elem.ent 
of the patented combination were old in the prior art as repre- 
sented by patents such as Wey Patent No. 2,901/904 appearing 
at Page 4 of PLAINTIFF-APPELLANT'S REPLY BRIEF and reproduced 

herebelow: 

Fig.; ,. 
y " 





Wey Patent No. 2,901,904 
Once the panel made the mistake of assuming that the 
patented invention was the plastic strip per se it was inevit- 
able that such panel would err in applying the law regarding 
file wrapper estoppel. Thus, the panel after deciding the in- 
vention resided solely in the plastic band concluded that 
since the patent application claims did not initially recite 
the strip as being tapered, while the claims of the patent as 
issued included such tapering language, the tapering language 
was added to overcome a rejection on prior art. This conclu- 
sion of the panel was expressed as follows: 

"Modest as the taper's contribution 
may be to prior art, it appears from the 
file wrapper to be the only contribution 
• that the Patent Office was willing to 
, concede that appellant had made." 



As noted hereabove the taper coul d not possibly be a 
contribution to the prior art since such tapers were old in 
the prior art. The Patent Examiner was well aware of this fact 
since he had before him Jacobson Patent No. 2,025,209 appearing 
at Page 4 of Plaintiff -Appellant ' s Reply Brief and appearing 
below. Jacobson shows a vertically tapered band in a pavement 
joint. 



J5^ 



Z3 




Jacobson Patent No. 2,025,209 

Actually, what was new and what was patented was the 
combination of a length of paving in which a cruciform plastic 
strip was embedded in the paving so that its vertical element 
fractured the paving as the paving cured, while its horizontal 
element served as a flexible waterstop in the completed weakened 
plane joint. This concept was completely new and was the real 
contribution made by appellant to the art of paving. 

If the panel had not made its critical mistake of 
fact, the panel would have applied the law of file wrapper es- 
toppel set forth by this Court in International Manufacturing 
Co. V. Landon 336 F.2d 723 (August, 1964). In International, 
this Court stated that file wrapper estoppel does not occur 
unless a claim is modified to obtain its allowance in such a 
manner as to go to the heart of the invention. Thus, this 



Court stated: 

"The gravamen of file wrapper estoppel , 
as this Court recently, said in M.O.S. Corp. 
V. John I. Haas Co., 9 Cir., 332 F.2d 910, 
141 USPQ 767, is that an applicant who 
acquiesces in the rejection of his claim, 
and accordingly modifies it to secure its 
allowance, will not subsequently be allowed 
to expand his claim by interpretation to 
include the principles originally rejected, 
or their equivalents. 

As indicated by the statement made by 
the examiner at the time, claim 10 v;as not 
rejected because of an overly-broad defini- 
tion of filter elements, or because it per- 
mitted use of a sock-type filter. It was re- 
jected for the reason that claim 10, read 
as a whole, was unpatentable over other 
named patents. The disc-like filter ele- 
ment could not be the heart of the Pace in- 
vention since it, as well as the sock-type 
filter element, is old in the art. What 
was new, and what was patented, was the 
combination of parts in which a filter unit 
is correlated to the remaining elements so 
that the combination performs the desired 
skimming and filtering functions ." (Emphasis 
Added. ) 



Because the International Manufacturing Co. case is 
on all fours v;ith the present case, a brief examination of the 
facts in International is believed necessary. In Internation al 
the patented combination was a water recirculation system for 
use in sv/imming pools and included a filter, a filter housing, 
a water passage, a screen, a buoyant weir and a pump. The 
questioned patent claim originally recited the filter in broad 
terms. During the patent prosecution the definition of the 
filter was narrowed to recite such filter as being disc-like. 
The infringer's device utilized a sock-type filter. It was the 
infringer's contention that since the patent claim originally 
recited the filter in broad terms and was later narrowed to 
recite the filter as being disc-like, a file wrapper estoppel 
existed against construing the claim broadly enough to read 
upon the infringer's sock-type filter. 

As indicated by the above language, this Court in 
International rejected such contention on the basis that the 
disc-like filter could not be the heart of the invention since 
it was old in the art , and that what was new and what was 
patented was the combination of parts in which a filter unit 
of any type was correlated to the other elements of the 
combination so that the combination performed the desired 
function. 

I 

From the above review of the International case, 
it will be seen that the present case is exactly apposite. 
In the present case the patent claims did not initially recite 
the vertical band as being tapered. During the prosecution 



-7- 



of the application, however, the tapering of the vertical 
band was added to the claims. How could such tapering possibly 
be considered the heart of the invention in view of the fact 
that vertically tapered bands were old in the art , as repre- 
sented by the aforementioned Wey and Jacobson patents? 

As noted at Page 35 of Plaintiff-Applicant's Opening 
Brief, the tapering language was added to the claims in con- 
junction with newly-presented functional language to revise the 
form of the claims and thereby better distinguish the principle 
of operation of the entire combination over the cited British 
patent. 

What was actually new and what was actually patented 
by appellant is set forth in the patent claims. These patent 
claims clearly recite a weakened plane joint comprising a 
length of paving and a generally cruciform resilient strip 
wherein the vertical band of the strip is correlated with the 
paving so that it effects the vertical fracture of the weakened 
plane joint and the horizontal band of the strip provides a 
flexible waterstop between the paving at the sides of the com- 
p.leted joint. A weakened plane joint of this description was 
completely new in the paving art, was a great commercial suc- 
cess, and was copied by the defendants. 

From the foregoing argument it will be clear that 
the decision of the panel cries out for a rehearing. More- 
over, since the panel found that the accused device "is similar 
in function and very similar in appearance" and "performs the 
identical function in substantially the same manner as does the 



_Q_ 



patented device," it will also be clear that the accused device 
infringes. Petitioner therefor prays for a rehearing and re- 
consideration and ultimately a reversal of the Summary Judgment. 
Such reversal will result in uniformity with the law in this 
Circuit as exemplified by the International case. 

Respectfully submitted, 

FULWIDER PATTON RIEBER LEE & UTECHT 

By Francis A. Utecht 

Attorneys for Petitioner, 
Edoco Technical Products, Inc. 



/f 



^A<l/iA.<>£.^ CX>% 




Francis A. Utecht 



-Q- 




-'JLi:'i969 



UNITED STATES COURT OF APPEALS 
FOR THE NINTH CIRCUIT 



SODERHAMN MACHINE MANUFACTURING 
COMPANY , 

Appellant, 



vs. 



THE MARTIN BROS. CONTAINER & 
TIMBER PRODUCTS CORP., 



Appellee. ) 



M *. i.1 



J^L 151 



NO. 22281 ^- CLERK 

APPELLEE'S PETITION FOR 
REHEARING 



Pursuant to Rule 40, Federal Rules of Appellate 
Procedure, Defendant-Appellee respectfully petitions the Court 
for rehearing with respect to and involving the items in the 
Court's Opinion of July 2, 1969, hereinafter set forth. 

1. Barker Foundation Structure 

The barker foundation structure was the structure 
holding the barker, as distinguished from the machine itself. 
The Court may have been misled by the heading in Invoice 
D 1141 "Repair to Barker", but the items detailed on the 
invoice refer unmistakenly to the barker structure. Soderhamn 
concedes this so far as some items are detailed, and concedes 
that the witness, Halverson, gave testimony that this invoice 



was properly chargeable to the barker structure (Brief p. 32). 
This Court has eliminated entirely the sum of $3,084.32 repre- 
sented by this invoice. The item should be restored. 

2 . Kicker, Kicker Shafts and Kicker Arms 

• This Court affirmed the District Court in the 
finding that the kicker system was defective. The District 
Court had before it in finding the damage, as a part of 
Exhibit 921-A through 921-N (which had been received in evi- 
dence, Tr. p. 356) Invoices D 1559, D 1615, D 1368, D 1368-A, 
D 1306, D 1306-A, D 1365 and D 1241, and included them in 
determining Martin's damage. The record clearly shows that 
these invoices had been received in evidence (Tr. 356) and 
also that the supporting data for these invoices had been 
received in evidence as Exhibit No. 931 (Tr. 187). This 
Court mistakenly stated that the invoices were not intro- 
duced in evidence and that Martin offered in evidence only 
invoice summaries which the District Court ordered stricken 
from the record, and consequently modified the District 
Court's findings by reducing the damage to $35.00. The 
exhibit referred to as a summary, entitled "Survey of con- 
dition existing and remedial work performed to place same 
in operable condition" was offered only as an aid to the court, 
and was withdrawn (Tr. 351) only because a copy was attached 

- 2 - 



to and a part of Exhibit 921 A through N, already in evidence. 
This reduced item of damage should be restored. 

3. Sheer Aprons 

This Court affirmed the trial court in its 
finding that the sheer aprons were necessary to the unit as 
conceived in the contract. This Court disallowed the cost 
of correction in the amount of $2,758.16 for the stated 
reason that the witness for Martin testified from summaries 
of invoices which were stricken from the record by the Dis- 
trict Court. 

The basic information from which the witness 
Halverson testified was contained in the exhibits and sup- 
porting business records, all of which were received in evi- 
dence as were the summaries which were offered for the con- 
venience of the Court, all as set forth in the foregoing sub- 
ject No. 2 relative to Kickers. This item should be restored, 

4. Hog Conveyor 

This Court sustained the District Court's find- 
ing that the hog conveyor installed by Soderhamn was insuf- 
ficient and it was necessary to redesign and reinstall the 
conveyor. This Court further found that there V'/as no compe- 
tent evidence to support the award of $14,063.02 for the 
necessary correction of this deficiency. 

- 3 - 



The Court cited as its authority for dis- 
allowing the necessary cost the fact that the evidence offered 
was summaries and that these were stricken from the record. 
Again, the basic evidence was contained in the invoice Exhi- 
bits 921-A through 921-N and v/ere received in evidence and 
the basic business records in support thereof were also in 
Court and were received in evidence and were available to the 
Court and the evidence as to cost was supported by these 
exhibits as well as the testimony of Mr. Halverson. 

In addition Soderhamn offered evidence that the 
reasonable cost of cure for the hog conveyor was less than 
the $14,063.02, one of Soderhamn' s witnesses putting reason- 
able cost at $3,000 to $5,000 (Tr. 1778) and another Soder- 
hamn witness, Mr. Wahl, at $5,970 (Tr. 1688). There was 
evidence to sustain damages and the items allov;ed by the 
District Court should be restored. 

5. Prejudgment Interest 

The Court allowed prejudgment interest on two 
Items aggregating $1,018.40, the amounts being ascertainable 
by simple computation and a time of definite default being 
ascertainable. The Court also affirmed the trial Court in a 
determination that Soderhamn had failed to furnish a debark- 
ing machine, or barker, for which Soderhamn had received 
$81,500.00 of Martin's money. The Opinion states "The Dis- 
trict Court properly held that Martin was entitled to a 

- 4 - 



I 



refund or abatement of the purchase price of the machine", 
A note in the opinion refers to a sale by Soderhamn to some 
third party, which the pre-trial order shoves followed removal 
of the barker from the Martin plant on November 13, 1963, 
from which date Soderhamn claimed interest. Interest on this 
refund to which Martin was entitled in the sum of $81,500.00 
from January 1, 1964, as allowed by the trial court, should 
be restored. 

WHEREFORE, Defendant-Appellee, Martin, prays that 
this Court grant a rehearing with respect to the foregoing 
matters, or in the alternative, modify its opinion and judg- 
ment by restoring the items of damage as found by the District 
Court and restoring the pre-judgment interest on $81,500, the 
price o£ the barker. 

Respectfully submitted, 

Irving Rand 

Georg^ W. Mead 

1211 Public Service Building 

Portland, Oregon 97204 

Attorneys for Defendant- 
Appellee 



- 5 - 



Due service of the v;ithin Appellee's Petition for 
Rehearing is hereby accepted in Multnomah County, Oregon, 
this 14th day of July, 1969, by receiving a copy thereof, duly 
certified to as such by George W. Mead, of Attorneys for 
Defendant -Appellee. 



Sd. Jack H. Dunn 

Of Attorneys for Plaintiff- 
Appellant 



I hereby certify that I have prepared the foregoing 
copy of Appellee's Petition for Rehearing and have carefully 
compared the same v/ith the original thereof; and that it is a 
correct copy therefrom and of the whole thereof. 

Dated this 14th day of July, 1969. 



' Ge^te^' Mead ^^ 
Of Attorneys for Appellee 




IN THE UNITED STATES COURT OF APPEALS 

FOR THE NINTH CIRCUIT ''; 1 ^r\cc\ 

NO. 22,708 '^ JflOl/t'(^ 

UNITED STATES OF AMERICA, 

Appellant, 
-V- 
STADIUM APARTMENTS , INC . , ET AL . 

Appellee , 




/A 



ON APPEAL FROM THE UNITED STATES DISTRICT COURT 
FOR THE DISTRICT OF IDAHO 



BRIEF FOR AMICUS CURIAE - STATE OF WASHINGTON 



FILED 

JUL 1 5 \969 
m. B. LUCK. CLERK 



STATE OF WASHINGTON 

Slade Gorton 

The Attorney General 

RICHARD A. MATTSEN 
Assistant Attorney General 
Temple of Justice 
Olympia, Washington 98501 

Attorneys for the 

STATE OF WASHINGTON 



IN THE UNITED STATES COURT OF APPEALS 
FOR THE NINTH CIRCUIT 

NO. 22,708 
UNITED STATES OF AMERICA, 

Appellant, 
-V- 
STADIUM APARTMENTS, INC., ET AL. 

Appellee , 



ON APPEAL FROM THE UNITED STATES DISTRICT COURT 
FOR THE DISTRICT OF IDAHO 



BRIEF FOR AMICUS CURIAE - STATE OF WASHINGTON 



STATE OF WASHINGTON 

Slade Gorton 

The Attorney General 

RICHARD A. MATTSEN 
Assistant Attorney General 
Temple of Justice 
Olympia, Washington 98501 

Attorneys for the 

STATE OF WASHINGTON 



THE STATEMENT OF POSITION OF 
THE STATE OF WASHINGTON 

The State of Washington files this amicus 
curiae brief pursuant to an invitation expressed in 
an Order of this Court dated May 8, 1969. 

For its argument and conclusion, the State 
of Washington concurs in and adopts the position taken 
by the amici curiae brief filed by the State of Cali- 
fornia herein. The State of Washington has pre- 
viously joined in the brief filed herein by the State 
of Idaho, and its adoption of the views expressed by 
the State of California are in addition to its position 
previously taken. 

Respectfully submitted, 

STATE OF WASHINGTON 

Slade Gorton 

The Attorney General 



RICHARD A. MATTSEN 
Assistant Attorney General 
Temple of Justice 
Olympia, Washington 98501 

Attorneys for the 

State of Washington 



-1- 



CERTIFICATE OF MAILING 

. .^/ 
I hereby certify that I have on this |^ 

day of July, 1969, served the foregoing brief of 

Amicus Curiae upon the Appellant by placing two (2) 

true and correct copies of the same in the United 

States mail, postage prepaid, addressed to: 



Mr. Clarence D. Suiter 
Assistant United States Attorney 
District of Idaho 
550 West Fort Street 
Boise, Idaho 

ATTORNEY FOR APPELLANT 




"'A'N^h^VjL U. \j^Nan: 



r^LU^oLr 

RICHARD A. MATTSEN""^ 
Assistant Attorney General 
STATE OF WASHINGTON 



J 



-2- 



i 



/ 



No. 22,272 JUNiG1969 

IN THE 

United States Court of Appeals 

For the Ninth Circuit 



Kaiser Steel Corporation, 



vs. 



United States op America, 



Appellant, 



Appellee. 




On Appeal from the Judgment and Order of the 

United States District Court for the 

Northern District of California 

APPELLEE'S PETITION FOR REHEARING 



Johnnie M. Waiters, 

Assistant Attorney General. 

Lee a. Jackson, 
Grant W. Wiprud, 

Attorneys, 

Department of Justice, 
Washington, D.C. 20530. 

Of Counsel: 
Cecil F. Poole, 

United States Attorney. 

Richard L. Carico, 

Assistant United States Attorney. 



FILED 



v: iu:;r;ci' 



PERNAU-WALBH PRINTING CO., SAN FRANCISCO, CALIFORNIA 



Table of Authorities Cited 



Cases Pages 

United States v. Cannelton Sewer Pipe Co., 364 U.S. 76. . . . 2, 7 



Regulations 

Treasury Regulations (1939 Code): 

103, Section 19.23(m)-l(f) 3 

111, Section 29.23 (m) -1(f) 3 

118, Section 39.23(m)-l(e) (3) 3 

Treasury Regulations (1954 Code): 

Section 1.613(b) through (f) 3 

Section 1.613-3(b) (2) (b) 3 

Section 1.613-3(c) 6 

Section 1.613-3(c) (1) 4 

Section 1.613-3(c) (3) and (4) 5 

Section 1.613-3(e) (2) 5, 6 

Section 1.613-3(e) (2) (i) 6 

Section 1.613-3(e) (2) (iii) 5 



Rules 

Federal Rules of Appellate Procedure, Rule 40 1 

Statutes 

Internal Revenue Code: 

Section 114(b) (4) (B) (1939 Code) 2 

Section 613(c) (1954 Code) 2 

Revenue Act of 1950, Section 207 2 



I 



No. 22,272 

IN THE 

United States Court of Appeals 

For the Ninth Circuit 



Kaiser Steel Corporation, 



vs. 



United States of America, 



Appellant, 



Appellee. 



On Appeal from the Judgment and Order of the 

United States District Court for the 

Northern District of California 

APPELLEE'S PETITION FOR REHEARING 



The United States of America, pursuant to Rule 
40 of the Federal Rules of Appellate Procedure, re- 
spectfully petitions for a rehearing with respect to 
one part of the decision entered herein on April 29, 
1969, i.e., the mling (Slip Op. 5-7) that ''freight dif- 
ferentials" should enter into the computation of tax- 
payer's ''gross income from mining". In result this 
ruling includes the costs of nonmining transportation 
in taxpayer's depletion base — and such inclusion is 
prohibited by long-standing statutory and regulatory 
provisions, as to all methods of computing depletable 
mining income. 



A miller is entitled to depletion only on ''gross 
income from mining". By statutory definition ''min- 
ing" consists of extraction from the gi'oimd, specified 
processes in a plant or mill, and transportation— 
not in excess of 50 miles unless authorized by the 
Commissioner— from the mine to the plant or mill 
where the "mining" processes are applied. Section 
114(b)(4)(B) of the 1939 Code; Section 613(c) of 
the 1954 Code.^ In the case of iron ore and certain 
other ores and minerals, "mining" processes are de- 
fined as those employed to bring the crude ore or 
mineral to shipping grade and form, plus loading for 
shipment. Section 114(b) (4) (B) (iii), supra; Section 
613(c)(4)(C), supra. 

If a miner sells his cnide mineral at the termina- 
tion of "mining" processes, without exceeding the 
limit allowed for "mining" transportation, then his 
depletable mining income is, of course, his actual in- 
come. If, prior to sale, the miner applies nonmining 
processes or resorts to nonmining transportation, then 
his income from "mining" must be determined con- 
stnictively. Such a constructive computation must 
eliminate any preference over the ordinaiy miner, 
whose depletion base is computed at the point where 
the raw mineral product of "mining" is ready for 
shipment to the market. United States v. Cannelton 
Sewer Pipe Co., 364 U.S. 76. 



iNot even this limited amount of transportation was inchided 
in "mininp" under Section 114(b)(4)(B) as ori^nally enacted; 
it was added, for taxable years beginning after December 31, 
1949, by Section 207 of the Revenue Act of 1950. The amend- 
ment is inapplicable to the instant case since the taxable years 
involved are taxpayer's fiscal years ended June 30, 1949, and 
June 30, 1950. 



Since 1940 successive Treasury Regulations have 
reflected the foregoing statutory scheme and provided 
for constructive computations of ''gross income from 
mining".- In its basic featiu'es tlie regulatory pattern 
has remained substantially the same over the years. 
If a miner's operations are confined to ''mining" 
processes and "mining" transpoi-tation, his gross sales 
constitute his depletion base. (The 1939 Code Regu- 
lations speak of sales "in the immediate vicinity of 
the mine"; the 1954 Code Regulations (Section 
1.613-3 (b)(2)(b)) speak of sales after "application 
of only mining processes, including mining transpor- 
tation, and before any noiunining transportation".) 
If the ore or mineral is sold after nonmining processes 
or transportation, the Regulations provide that the 
miner's depletable mining income shall be computed 
by reference to a representative market or field price, 
if such a price can be established by sales in a rele- 
vant market of a "mining" product of "like kind 
and grade". Where a representative price cannot be 
established, "gross income from mining" must be com- 
puted under the proportionate profits method. 

The instant case involves a constructive computa- 
tion based on a representative market or field price. 
From the beginning, the regulatory provisions gov- 
erning such computations have explicitly required 
adjustments to exclude nonmining transportation 
altogether from the depletion base. Under the 1939 



sTreasttty Regulations 103 (1939 Code), Section 19.23 (m)- 
1(f); Treasury Regulations 111 (1939 Code), Section 29.23 
(m)-i(f), applicable to the taxable vears herein; Treasiirv Regu- 
lations 118 (1939 Code), Section ■39.23(m)-l(e) (3) ; Treasury 
Regulations (1954 Code), Section 1.613(b) through (f). 



Code Regulations, depletable mining income is equated 
witli the representative market or field price of a 
mineral product of like kind and grade, as beneficiated 
by ''mining" processes, ''before" any ti-ansportation 
other than transportation treated as ''mining". (Em- 
phasis supplied.) These Regulations further provide 
that, if the "product in its cnide state is merely trans- 
ported" prior to sale, then the depletion base shall 
be the sale price "minus the costs and proportionate 
profits attributable to the transportation * * *". 
Clearly, in keeping with the statutory definition of 
"mining", the 1939 Code Regulations exclude from 
constructive computations of mining income all trans- 
portation costs save those of moving the ore or min- 
eral, not in excess of 50 miles, from the mine to the 
plant or mill where the "mining" processes are 
applied. Transportation after completion of the 
"mining" processes — for distribution, marketing or 
delivery — is obviously nonmining transportation, 
whether or not in excess of 50 miles. Accordingly, no 
portion of the costs of such transpoi'tation is includ- 
ible in the computations. 

As already noted, the definition of "mining" trans- 
portation is the same in the 1954 Code as in the 1939 
Code. And the 1954 Code Regulations, like their 
predecessors, exclude nonmining transportation from 
constructive computations of depletable mining in- 
come. Thus, Section 1.613-3 (c)(1) pro^ddes for the 
use of a representative market or field price "after 
the application of the mining processes (if any) ac- 
tually applied and before any nonmining transporta- 
tion, subject to any adjustments required by para- 



graph (e) of this section". (Emphasis supplied.) Sec- 
tion 1.613-3(c) (3) and (4) provide for the use of a 
weighted average of competitive selling prices of 
minerals of like kind and grade, sold in the taxpay- 
er's actual or potential lines of commerce, taking into 
account taxpayer's own competitive sales — provided, 
that all sales taken into accomit must involve min- 
erals ''beneficiated only by mining processes * * *". 

In the instant decision this Court has aug-mented 
the taxpayer's depletion base by the costs of non- 
mining transportation to ''points of consiunption", 
to the extent that taxpayer's costs of this nature are 
exceeded by its competitors'.^ We submit that this 
is contrary to the statutory scheme and violates the 
explicit requirement of successive regulations that 
nonmining transportation shall be entirely excluded 
from the depletion base. 

This Court invokes in support of its ruling one 
sentence in Section 1.613-3 (e) (2) of the 1954 Code 
Regulations, but that sentence, read in context, does 
not support the ruling. Section 1.613-3 (e)(2) deals 
with one type of nonmining transportation, i.e., pur- 
chased transportation to the customer as defined in 
subparagraph (e)(2)(iii), where a computation of 



3The effect of this decision is to allow taxpayer to compute 
depletion on the value of the deposits attributable tO' their prox- 
imity to the "points of consumption." It should be noted in this 
connection that the Government exhibit reflecting "freight dif- 
ferentials" that is referi'ed to by the Court (Slip Op. 6) is 
apparently one which was offered during the testimony of R. 
H. B. Jones, who was called as a witness only after the state- 
ment of Government counsel that "we think the evidence is 
irrelevant, but we are calling (sic) it as a rebuttal to Kaiser's 
value presentation." (II-R 848.) 



representative mai-ket price is being made under Sec- 
tion 1.613-3(c). If the taxpayer applies only '"min- 
ing" pi-ocesses to his mineral and then ships it by 
"pm-chased transportation" to customers, it is pro- 
vided that his representative market price shall be 
his own "delivered price" mimts the costs of the pur- 
chased transportation. If the taxpayer does not use 
purchased transportation but his competitors do (and 
their prices other^vise qualify as representative) , then 
the representative market price shaU be the competi- 
toi-s' delivered prices less the costs of purchased trans- 
portation. The sole function of these operative pro- 
visions of Section 1.613-3 (e)(2) is to ensure the 
elimination of purchased transportation from the 
computation of representative market price. 

This Coui't relies for its ruling on the third sen- 
tence of Section 1.613-3(e) (2) (i) of the 1954 Code 
Regulations. That sentence, which relates only to the 
use of the competitors' delivered prices less costs of 
purchased transportation, provides that ''appropriate 
adjustments shall be made to take into accoimt dif- 
ferences in mode of transportation and distance". The 
evident purpose of this provision, in context, is to 
ensure that each competitors' actual cost of purchased 
transportation will be deducted from his delivered 
price in determining representative market or field 
price. This interpretation accords with the examples 
given at the end of paragi-aph (e) (2). Any other read- 
ing of the quoted language conflicts with the express 
requirement of all the Regulations from the be- 
ginning: That a representative price must l>e netted 



to eliminate nomniniiig transportation — whether it is 
purchased transportation or not. 

This Court's decision imports into tax depletion 
law a wholly new principle, imsuppoi-ted by ease law 
or administrative practice, which cannot be recon- 
ciled with either the statutory or the regulatory 
scheme. Nor, it may be added, can it be reconciled 
with the teaching of Cminelton that the goal of con- 
structive computations is parity with the ordinary 
miner — who must compute depletion on income earned 
when ''mining" is completed and before he ships his 
mineral to the market place. 

Coimsel for the United States certify that this peti- 
tion for rehearing is presented in good faith and not 
for the purpose of delay. For tlie reasons given, ap- 
pellant respectfully requests that the petition be 



granted. 



Respectfully submitted, 
Johnnie M. Walters, 

Assistant Attorney General. 

Lee a. Jackson, 
Grant W. Wiprud, 

Attorneys, 

Department of Justice, 
Washington, D.C. 20530, 



Of Counsel: 
CEcn. P. Poole, 

United Stat€s Attorney. 

Richard Ij. Carico, 

Assistant United States Attorney. 



June, 1969. 



No. 22342 

JUN2- 1969 

In the 

United States Court of Appeals 



For the Ninth Circuit 




Farmers Insurance Exchange, 

Appellant, 

vs. 

Joe Eose, Jr. and Veronica Rose, his wife. 

Appellees. 



ED 



IUN19(969 

Appeal from the Unifed Stales District Court 



for the District of Arizona 



Appellees' Response to Petition for Rehearing 



James H. Green, Jr. 

32 Luhrs Arcade 
Phoenix, Arizona 85003 

Attorney for Appellees 



SORG PRINTING COMPANY OF CALIFORNIA, 346 FIRST STREET, SAN FRANCISCO 94)05 



TABLE OF AUTHORITIES CITED 

Cases Pages 

Allstate Insurance Company v. Dorr, No. 22443 6 

Dairyland Mutual Ins. Co. v. Andersen, 433 P.2d 963 3, 5 

Globe Indemnity Co. v. Universal Underwriters Ins. Co., 20 

Cal. Rptr. 73 7 

New York Life Ins. Co. v. Hunter, 138 P.2d 414 3 

Peterson v. Hudson Ins. Co., 15 P.2d 249 3 

Sandoval v. Chenowith, 428 P.2d 98 5, 7 

Statutes 

Arizona Revised Statutes : 

Sections 28-1161, 1162, 1163 and 1166 4 

Section 28-1167 5 

Section 28-1168 5 

Section 28-1169 5 

Section 28-1171 5 



/ 



No. 23548 
In the 

United States Court of Appeals 

For the Ninth Circuit 



Farmers Insurance Exchange, 

Appellant, 

vs. 

Joe Rose, Jr. and Veronica Rose, his wife, 

Appellees. 



Appeal from the United Slates District Court 
for the District of Arizona 



Appellees' Response to Petition for Rehearing 



The Petition for Rehearing contains nothing which was 
not i^resented in the original brief and argued to the Court. 
The opinion of this Court issued May 7, 1969, in this 
matter, correctly disposed of Appellant's contention by 
pointing out that this policy was not a "certified" policy. 
The policy provision relied upon simply isn't applicable 
here. Appellant is asking this Court to decide how it would 



2 

hold if tho insurance company had certified the policy as 
proof of financial responsibility for the future. It should be 
a complete answer to point out that that is neither the fact 
nor the issue here. 

The lanp:uage of the policy provision Appellant relies 
on is a part of the contract between the insurer and the 
insured, whereby, if the policy is "certified as proof of 
financial responsibility for the future under the provisions 
of any motor vehicle financial responsibility law" and if 
the insurer is required to pay what it would otherwise not 
be required to pay under the policy, then the insured agrees 
to reimburse the company. 

Appellant has quoted only a portion of the said para- 
graph in its Petition for Kehearing, The balance of the 
paragraph reads as follows : 

''The insured agrees to reimburse the Company for any 
payment made by the Company which it would not 
have been obliged to make under the terms of this 
policy except for this agreement." 

Clearly, if the policy is not "certified as proof of financial 
responsibility for the future" under the Arizona law, then 
the provision referred to is not applicable as between the 
insurer and the insured and even less so as to the innocent 
accident victim injured by the insured. 

This provision of the policy does not limit the liability 
of the company to the injured third party, however, even 
when the policy is a "certified" one. 

To be acceptable under any financial responsibility law, 
a "certified" policy must provide coverage at least of the 
required statutory minimum. The clause in the paragraph 
which says "but in no event in excess of the limits of 
liability stated in the policy" has no meaning except that 
the company may be required to pay more than the statu- 
tory minimum even on a "certified" policy. 



3 

Appellant argues that the Arizona Supreme Court has 
abolished all distinctions between policies which are certi- 
fied and those which are not. Appellant is saying that there 
is no longer such a thing as a certified policy under Arizona 
law, and that therefore it doesn't matter that the policy 
wasn't "certified". Appellant is asking the Court to rewrite 
this paragraph of the insurance contract to say, in effect: 
"When the provisions of the omnibus clause of a 
state's motor vehicle financial responsibility law obli- 
gate the company to pay upon the said policy, the 
company shall be liable only to the extent of the cover- 
age required by law and the insured shall reimburse 
the company for any pa>^nent so made by it." 

There is a vast difference between this and what the pro- 
vision now says and means. 

For the Court to so rewrite the policy would be con- 
trary to the usual rules which provide that insurance pol- 
icies are to be construed most strongly against the insurer 
and that the Court will not expand the language of the 
contract beyond its plain and ordinary meaning or add 
thereto. New York Life Ins. Co. v. Hunter, 138 P.2d 414; 
Peterson v. Hudson Ins. Co., 15 P. 2d 249; and Dairyland 
Mutual Ins. Co. v. Andersen, 433 P.2d 963. 

To do as Appellant requests would, of course, do terrible 
violence to the present language and intent of such pro- 
vision, as well as to the public policy as announced by the 
Arizona Supreme Court. 

Appellant's contention that the distinctions of a "certi- 
fied" policy still have specific purpose and function in 
Arizona then the policy provision referring thereto must 
still have some contractual meaning and the Appellant 
can't be heard to say that when the contract refers to a 
"certified" policy it doesn't mean it. 



4 
The insured who has a policy containing such a provision 
miglit reasonably be expected to understand that if: 

1. He requests the insurance company to certify the 
policy as proof of financial responsibility for the 
future under the Arizona law, and 

2. The insurance company does so certify it, and 

3. He has an automobile accident causing injury to a 
third person, and 

4. The company makes a payment on the policy which, 
except for their "agreement", it would not have been 
obliged to make, then 

5. He is obligated to reimburse the company for such 
payments. 

An insured with such a policy provision could hardly 
be expected to understand from it that: 

1. Even though the policy was not certified as proof of 
future financial responsibility, then, 

2. If he has an accident causing an injury to a third 
person, 

3. The insurance company may reduce the coverage on 
his $50,000.00 policy to $10,000.00, and 

4. Seek reimbursement from him. 

Yet, this is what Appellant is contending should happen 
under this policy provision. 

There are certain statutory conditions where a person 
must give proof of financial responsibility for the future 
in Arizona if he desires to retain his driver's license and/or 
the registration license for his vehicle. This proof is re- 
quired, for example, under Arizona Kevised Statutes, Sec- 
tions 28-1161, 1162, 1163 and 1166, where a driver's license 
is suspended following conviction of a serious traffic of- 
fense or because the driver has failed to pay a judgment 
arising as a result of an automobile accident. 



5 
Arizona Revised Statutes, Section 28-1167, provides that 
proof of such financial responsibility may he given by 
filing a certificate of insurance as provided in Arizona Re- 
vised Statutes, Section 28-1168 or in Section 28-1169, which 
applies to nonresidents. 
Arizona Revised Statutes, Section 28-1168, provides : 

"Proof of financial responsibility may be furnished 
by filing with the superintendent the written certificate 
of an insurance carrier duly authorized to do business 
in this state certifying that there is in effect a motor 
vehicle liability policy for the benefit of the person 
required to furnish proof of financial responsibility. 
The certificate shall give the effective date of the 
motor vehicle liability policy, which date shall be the 
same as the effective date of the certificate, and shall 
designate by explicit description or by appropriate 
reference all motor vehicles covered thereby, unless 
the policy is issued to a person who is not the owner 
of a motor vehicle. 



It may be noted at this point that these "certified" pol- 
icies are required only for drivers who have, for some 
reason, placed themselves in the category of poor or bad 
risks. It is difficult to imagine an insurance company writ- 
ing a "certified" policy for more than the minimmn required 
coverage where the insured's license is suspended. 

It is also important to note that under Arizona Revised 
Statutes, Section 28-1171, the insurance company cannot 
cancel its certified policy until ten days after it has filed 
a notice of termination with the superintendent. 

The case of Dairyland Mutual^ his. Co. v. Andersen, 433 
P.2d 963, was decided by the Arizona Supreme Court sev- 
eral months after the case of Sandoval v. Chenoivith, 428 
P.2d 98. In the Dairyland case, the Arizona Supreme Court 



6 
iimdi' it clear that tht" special purposes and cliaracteristics 
of "certified" policies are still very much in force and 
eflFect. 

In that case the insurance company relied upon a policy 
provision almost, if not exactly, identical to the one Ap- 
pellant relies on here. In the Dairyland case, the insurance 
company said, in effect, "Under the policy provision the 
insured must reimburse us if we are required to pay; 
therefore, we are not liable to the insured and therefore 
not liable to the accident victim injured by the insured". 
The Court said at Page Qfifi : 

". . . We reject such a tenuous argument as obviously- 
contrary to the public policy of this state. Tlie purpose 
of certification as proof of financial responsibility for 
the future, under A.K.S. §28-1168 of the Arizona 
Safety Responsibility Act, is to supply financial re- 
sponsibility against which a person damaged or in- 
jured by the insured's act may have recourse. To hold 
with Great Basin would be to completely destroy the 
purpose of certifying proof of financial responsibility." 

The Court then proceeded to order that if the trial court 
determined that the policy was "certified as proof of finan- 
cial responsibility" then it was to enter an appropriate 
judgment in favor of the insurer and against the insured, 
based on said policy provision. 

Allstate Insurance Company v. Dorr, No. 22443, was 
decided by this Court on May 2, 1969, just five days before 
the opinion was issued in this case. The opinion, written 
by Judge Madden, dealt with the Arizona motor vehicle 
financial responsibility law. The Court opinion there, writ- 
ten by Judge Madden, briefly, but correctly, stated that 
the liability of the insurance company is not limited to 
the $10,0()0.()() minimum, 1)ut extends to the full extent of 
the policy limits. The Court, in its opinion, said: 



7 

". . . Mr. Dorr, as the father of his deceased son . . . 
obtained a judgment ... for $20,000. . . , Mr. Dorr 
would have been able ... to collect from Allstate up 
to the limits of its policy ... his judgment against" 
the Defendants. (Emphasis Supplied.) 

Appellant struggles mightily to find some "implication" 
in the Sandoval opinion which would support its conten- 
tion. First the Appellant "presumes", Page 13 of its orig- 
inal brief, that the policy in the Sandoval case had no pro- 
vision such as it relies upon. Then, in its Petition for Re- 
hearing it purports to quote language of the Arizona Su- 
preme Court in the Sandoval opinion, when, in fact, it is 
quoting the language of the California court in Globe In- 
demnity Co. V. Universal Underwriters Ins. Co., 20 Cal. 
Rptr. 73, which is quoted, in part, in the Arizona decision. 

The Arizona Supreme Court, in its language in the 
Sandoval case, did not imply anything such as Appellant 
suggests, but it expressly held the company liable to the 
full extent of the policy limits and made it clear that the 
result would be no different under a "certified" policy. In 
doing so, it reversed the lower court and reiterated the 
strong public policy of the State of Arizona to afford 
maximum protection to the innocent victims of traffic acci- 
dents. 

Appellees respectfully urge that the Petititon for Re- 
hearing be denied. 

James H. Geeen, Jr. 

32 Luhrs Arcade 
Phoenix, Arizona 85003 

Attorney for Appellees 




/ 



;^os. 2 2397 - 2 23S8A 



In The 



d States Court of Appeals 
For the Ninth Circuit 



JW^ 2. ?o,9 



11. 1 h=sf s^ L=^ 

JUN 1 8 1Q5Q 



No. 22397 



K. CLERK 



UNITED STATES OF AcIERICA, 



Appellant, 



vs . 



CALIFORNIA PORTLAND CiTaENT COMPANY, a corporation. Successor- 
in-interest to AP.IZOtvA PORTLAND CE2-1ENT CC^!P?i^TY, a corporation, 

Ap^pollee. 



No. 2 23 9 7-A 

CALIFORNIA PORTLAND CEMENT COMPANY, a corporation. Successor- 
in-interest to ARIZONA PORTLAND CEMENT COMPANY, a corporation, 



vs . 



Cross- Appellee 



UNITED STATES OF i^iMERICA, 



Cros£r Appellant. 



No. 22398 



UNITED STATES OF AI'lERICA, 



v2 • 



CALIFORNIA PORTLAND CEMENT COMPANY, 



No, 2 239S-A 



CALIFORNIA PORTLAND CE:'IENT COMPANY, 



vs 



Appellant, 



Appellee. 



Cross-Aopellant , 



UNITED STATES OF AI'lERICA, 



Cross-Appellee. 



CALIFORNIA PORTLAND'S PETITION FOR REHEARING 



JOSEPH D. PEELER 
STUART T. PEELER 
PETER C. BRADFORD 
MUSICK, PEELER & GARRETT 

One VJilshire Boulevard 

Suite 2000 

Los Angeles, California 90017 
Counsel for Petitioners. 



Pursuant, to Ru3.e 40, FEDEPAL RULES OF APPELLATE 
PROCEDURE, petitioner respectfully requests a rehearing 
of this Court's decision entered June 4, 1969, for the 
follov/ing reasons: 

I. THE COURT'S RELIANCE ON A NEW REGULATION OF 
RESPONDENT, PROMULGATED WHILE THE CASE WAS 
ON APPEAL, APPEARS MANIFESTLY INEQUITABLE 
TO PETITIONER AND TO ESTABLISH A VERY UN- 
DESIRABLE PRECEDENT. 

We believe that the basis for the Court's 
opinion on the bagging question presents an important 
issue of judicial procedure. For many years, the 
pertinent regulation has been Section 39. 23 (in) -1 (e) 
of Treasury Regulations 118 (herein called "Regulation 
118").— This regulation survived several reenactrnents 
of the statute, was made applicable to the 195 4 Code by 
respondent,— and v;as regarded as not being changed by 
both the Treasury and Congress in tlie 1960 formulation 
of the statutory "kiln-feed" cut-off point applicable 
here.^ At all times prior to and including the briefing 



1. Regulation 118, made applicable to the 1954 Code by 
T.D, 6091, 1954-2 C.B. 47, is substantially identical 

to the first regulations adooted under the 193 9 Code — Reg. 
103, § 19.23 (m)-l(e) and, thereafter, Reg. Ill, § 2S. 23 (m) -1 (e) 

2. Ftn. 1, supra . 

3 . Hearing s Befo re _t h e House Cororai ttee en W ays a nd Means on 
Mineral "TreateGnt" Procesoes for Percentage De pleti on Purposes , 
'8 6th "Cong., Ist Sess/p. 47 (March 5, 1959). 



of this appeiil, both parties treated said regulation 
as controlling, ^* and it was the basis for the District 
Court's decision in favor of petitioners. On July 26, 

1968, however, 17 months after the District Court's 

/5 
decision adverse to it,- the Government superseded 

said Regulation 118 by a new regulation (Reg. § 1.613-3) 

which specifically adopted the result it had attempted 

and failed to obtain in the District Court. Moreover, 

respondent's new regulation stated that it v;as retroactively 

applicable for the proceeding 15 years. ^ 

In our respectful opinion, it is not consistent 
with the essentiiil justice of the judicial system to 
allow a litigant, once it has lost a case in the trial 
court, to promulgate nev; rules in its favor which control 
the appeal. The role of courts is to apply law to 
facts, and this process cannot function in a meaningful 
manner if one side has the pov;er to change the rules 
in m.id-strean^. . 

This court believed the new regulation could 
be given retroactive application because of Dixon v . 



4. See, e.g., the Government's opening brief on appeal, 
p. 18. 

"The specific methods by v/hich 'gross income from 
mining' shall be computed are set forth in the 
long-standing provisions of Section 39 . 23 (m) --1 (e) (3) 
of Treasury Regulations 118 (1939 Code)." 

5. Filed February 27, 1967. No. 22397, I-R. 117. 

6. To taxable years beginning after December 31, 1953. 



Unit ed States, 3S1 U.S. 68 (1965); Pollack_ v;^ Coi mnissioner , 
39 2 F.2d 4 09 (5th Cir. 19 68); and United States v. Fenix 
& Scisson, Inc. , 360 F.2d 260 (10th Cir. 1966). None of 
these cases, bovzever, involved circumstances v/ith any 
parallel to the present case. 

In Dixon, the Government retroactively withdrev; 
its acquiescence to a Tax Court decision. It specifically 
excepted from retroactive effect, however, the period 
between the announcement of its acquiescence and the 
withdrawal. 381 U.S. at 72, In Pollack, the courc's 
main emphasis was on the express language of the statute, 
but it did state that a regulation could be retroactively 
applied where no prior regulation had existed. In Fenix , 
there also was no prior regulation^ and there was an 
earliar revenue ruling which was nearly identical to 
the new regulation. 

It V70uld appear that the discretion of the 
Goverrmient to apply rulings or regulations retroactively 
should vary substantially, depending on the factual 
circumstances. Thus, for example, it should have more 
freedom with respect to retroactivity v;here a ruling 
or acquiescence is involved, or where a new regulation 
does not supersede a prior, valid regulation of long 
standincr. The authorities establish this view. 



-3- 



In Internation al Bus. Mach . Corp^j/. United 

States, 343 F . 2d 914 (Ct. CI. 1965), the court held that 

the Government's discretion, provided in 26 U.S.C. 

§ 7305(b), to determine the retroactive effect of new 

rulings or regulations was not unlimited. There, a 

ruling applied retroactively to I.B.M. denied it a 

prior year excise tax exemption which had been allov/ed 

to Remington Rand, The court held that retroactive 

effect wculd not be permitted and stated: 

"Implicit, too, in the Congressional av;ard 
of discretion to the Service, through Section 7805 
(b) , is the pov;er as well as the obligation to 
consider the circum.stances surrounding the handing 
dovm of the ruling — including the comparative or 
differential effect on _the_ other tax payer s "in the 
same class. . . . Equa lity of treatment is~ so dominan t 
In our unders tand ing of j ustice .that discretioji, 
where it is ailox;ed a role, must pay the stri ctest 
heed . 

"... [Tjhe Commissioner's exercise of dis- 
cretion is reviewable . . . for abase, in the same 
way as other discretionary a^lministrative determina- 
tions , The Internal Revenue Service does not have 
carte blanche. Its choice must be a rational one, 
supported by "relevant considerations," 343 F.2d at 
920. (emphasis added) 

To date, the proper treatment of bagging has 

been judicially considered in more than 8 cases, and 

all have applied Regulation 118. United States v . • 

Ideal Basic Industries, 404 F.2d 122 (10th Cir. 1968), 

cert, denied. U.S. , (1969) v;as litigated slightly 



_4- 



ahead of the instant case, and the Tenth Circuit's 
decision (issued August 15, 1968) reached the same 
result as the District Court belov; and the majority 
of the other decisions deciding the bagging issue 
under Regulation 113. It is apparent, therefore, that 
retroactive application of the new regulation to petitioner 
does not give it equality of treatment with other taxpayers 
in the same class. In addition, the "equality of 
treatment . . . dominant in our understanding of justice" 
must mean that one litigant cannot have the pov;er to 
retroactively apply new rules to its litigation V7hile 
on appeal. 

The Court states (Op. 4) that the nev; regula- 
tions "have the force and effect of lav;. " If this is 
true of the new regulation, it certain3.y must be true 
of the superseded regulation v;hich, prior to supersession, 
was in effect for many years and survived several re- 
enactments of the statute. Clearly the Treasury, however, 
as an administrative tribunal, has no power to retro- 
actively change prior law. 

The Governm.ent ' s pov;er to retroactively amend 
a prior, valid regulation of long standing v/as considered 

by the Supreme Court in ^^]:XS'£}:_'^^£_X:^_^l,_J,Jt-J^YJ}2l.^ 
Tobacco Co,, 306 U.S. 110 (1938). In holding that. 



-5- 



under the substantially similar predecessor to § 7805(b), 
the Treasury could not retroactively amend its long- 
standing regulations, the court stated: 

"Since the legislative approval of existing 
regulations by reenactment of the statutory provision 
to which they appertain gives such regulations the 
force of lav;, we think that Congress did not intend 
to authorize the Treasury to repeal the rules of 
lav7 that existed during the period for v/hich the 
tax is imposed." 306 U.S. at 116. 

Similarly, in Broadcasting Publ ications, Inc. v. District 

of Columbia, 313 F . 2d 554, (D.C. Cir. 1962), the court 

held : 

"Where valid regulations are in force at the 
operative date of the tax, nev; or amended regulations 
are not to be given retroactive effect." 313 F.2d 
at 556. 

No case has been found which involved the 
extreme facts of a prior valid regulation of long 
standing and relied on by a lower court being superseded 
by a nev; regulation on appeal, months after the lov;er 
court's decision. In less extrem.e circumstances, however, 
the Sixth Circuit in Co mmissioner v. Goodv;yn Crockery 
Co., 315 F.2d 110, 113 (6th Cir. 1963), refused to 
consider as binding a nev; regulation promulgated after 
the lower court's decision. 

For the above reasons, we respectfully submit 
that no v;oight whatever should have been given to the 
Government's last minute new regulation, and that the 



-6- 



case should have been judged exclusively on the regula- 
tion applicable at the time of the District Court's 
decision. In this regard, v;e shall not repeat the 
discussion of bagging at pp. 30-35 of our opening brief, 
except to emphasize: 

(i) Regulation 118 specifically states that 
the computation must v7ork back from "the first 
mar]:etable product." 

(ii) The District Court found as a fact 
that bulk and not bagged cement was the first 
marketable product . 

(iii) As stated by the Ideal court: 

"Equally compelling is the simple logic that 
bulk cem.ent is the first marketable product, 
bagged cement is the second marketable product. 
" 40 4 F. 2d at 126. 



• • 



(iv) To supersede "the first marketable 
product" v/ith the "group of products" concept 
introduced In the nev; regulation, results in two 
constructive depletable prices for a single fungible 
prodact--kiln feed. 

(v) The weight of authority on the point 
supports the District Court. This court thought 
certain cases pertaining to nonintegrated miners 
were distinguishable. All the cases cited involved 
the same question, however--detcrmination of the 



-7- 



first marketable product. Once such determination 
was made, the nonintegrated cases directly applied 
the depletion percentage, v;hile the integrated 
cases then had to use this starting point to v/ork 
back under the proportionate profits formula. 

(vi) The Government's petition to the United 
States Supreme Court for certiorari in the most 
recent case favoring petitioner- -Ideal Basic 
Industries, supra--v;as denied on June 2, 1969. 
II. THE DISTRICT COURT'S FINDINGS ON THE CASH 

DISCOUNTS ISSUE WERE NOT CLEARLY ERRONEOUS. 
The District Court found that petitioner's 
discounts were offered for the purpose of inducing 
prompt payment of its invoices and not to induce sales 
of its cement, and that these were cash discounts 

n 

rather than trade discounts.— These findings v/ere 

/8 

supported by substantial evidence— and, therefore, 

were required to stand unless clearly erroneous. FED. 
RUL. CIV. PROC. 52(a3; Bloom v. United States, 272 F.2d 
215 (9th Cir. 1959) , 

In apparently holding that the findings 
were clearly erroneous, this court made the follov;ing 
points; 



7. F.F. 13 

8. Pltf. Ex, 20 B-C, 232-37, 388; Pltf. Ex. 24, p. 4. 



(i) In Southwgstern Portlaitd Cement Co. v. 
yi}l_tGd^-§tatGS , 22 AFTR 2d 5874, 5877 (CD. Cal. 
1968) , that District Court held sirailar discounts 
to be trade discounts. 

(ii) The discount did not represent a fair 
interest rate. 

(iii) The discount v;as rarely disallov;ed. 

(iv) The discount v;as prevalent in the 
industry. 

Southv/sstern Portland involved key subsidiary 

findings not present here: 

"The discounted price was offered to customers 
prirvarily to encourage purchases in competitive 
situations, . . . and vas not a device to obtain 
prompt payment from customers, . . . "/-^ 

In the present case, the uncontroverted testimony 

i>73,s that the purpose of petitioner's discounts v;as to 

induce collection of its accounts. ^i Moreover, it 

does not appear that petitioner should be bound by 

findings of fact in a case in which it was not a party. 

The Government, however, has been a party to three 

other cases (tvo involving the Southern California market) 



9. F.F. 23 and 25. 

10. E.g., Pltf. Ex. 20-B, 222, 235 

-0- 



i 



in which similar discounts were held to be cash rather 
than trade discounts.— 

The question of a fair interest rate has 
appeared in the Government's Rev. Rul. 60-257, 1960-2 
C.B. 197 (not applicable to taxable years ending prior 
to January 1, 1960) and Rev. Rul. 55-13, 1955-1 C.B. 
285. At most, this factor v/ould appear only of 
evidentiary value on the question v;hether the purpose 
of the discounts was to induce payment or to induce 
product sales. This court, reviev/ing the voluminous 
record, concluded that petitioner's discount, amounting 

to about 5-1/2% of sales / "was allowed for prepayment 

/] 2 

of anywhere between 1 and 20 days."--' Actually, 

accounts were considered discounted if paid by the 10th 
of the month following billing and delinquent if not 
paid by the end of said month.— Accordingly, the pre- 
payment period v:as at least 20 days, and longer where 
a customer did not wait until the last minute to take 
the discount. 



^1- California Portland Cement Co. v. Ri d dell , 59-1 U.S.T.C. 

para. '515 6 "(F.F. 14)' (S.D. Cal. 1953), rev'd. on other 

5 ^ unds, Riddell v. California Portland Cemen t Co . , 297 F . 2 d 

34 5 (9th Cir. 196 2); Riverside Cement Co. v. United 

States, 58-2 U.S.T.C. para. 9905 (F.F. B) (S.D. Cal. 1958); 

Standard Lima & Cemenb Co. v. United States, 329 F.2d 939 

(Ct. CI. 196 4)'". 

12. Op, 20. 

13. Pltf. Ex. 20-D 470. 



Petitioner's discount v;as approximately 2-1/2 
times the "2% 10th day, net 30 days" terms common through- 
out many vendor industries. There are numerous small 
purchasers in the construction industry, however, many 
of v/hom are not good credit risks. Accordingly, the 
size of petitioner's discount, in this industry context, 
is entirely consistent v;ith petitioner's stated purpose 
to use its discount to effect collection of its accounts.^ 
Obviously, v/here the discount is of sufficient si7.e to 
be meaningful, it v/ill be an inducement for customer 
payment ahead of other suppliers, and petitioner's 
bad debts experience, was extrem.ely low./ 

The court also thought the fact that petitioner's 
discounts V7ere rarely disallowed was indicative of a 
trade discount, allowable in all events. The only 
direct testimony, hov;ever, was that the discount v/as 
used and was effective to induce payment. It certainly 
had this effect, because approximately 95% of petitioner's 

accounts v;ere paid by the end of the month following 

/IE 

billing.— There would have been no reason for such 

rapid payment if plaintiff's customers had viev;ed the 
discount as a mere price making device. 



14. N. 10, su pra . 

15. Pltf. Ex. 20-D at 234 

16. Pltf. Ex. 20-B, 234. 



The court's final point was that the discount 
v/as prevalent in the indiastry. V7e respectfully submit 
that this should not be material, because an industry 
could have a uniform credit policy, as v;oll as a price 
policy. Thus, for example, if all suppliers had follov;ed 
a "2% 10, net 30" policy, the fact of a cash discount 
would have been unquestioned. 

The Government's principal evidence was the 
theorizing of an accounting professor, v/ho admitted 
his familiarity with the cement industry was limited 

to prior testimony in two cases as a paid witness for 

/17 
the Government.— In contrast, petitioner's v/itnesses 

were experts in the industry, and their testimony was 

supported by the objective fact of petitioner's excellent 

collection experience, as v/ell as judicial findings in 

two earlier cases involving the same market area. In 

these circumstances, we submit that the District Court's 

findings should not be held to be clearly erroneous. 

Respectfully submitted, 

DATED: J une 1 7, 1969 JOSEPH D. PEELER 

STUART T. PEELER 
PETER C. BPuADFORD 

MUSICK, PEELER 6 GARRETT 
Counsel for Petitioners 



17. Plt£. Ex. 20-A, 9, 18-19, 23. 



L 



I am one of counsel for petitioners herein 
and I certify that in my judgment this petition is 
well founded and it is not interposed for delay. 

Peter C. Bradford 



NO. 22506/ 
IN THE 
UNITED STATES COURT OF APPEAi^S 
FOR THE NINTH CIRCUIT 



RUSSELL O. LAW, 



vs. 



Appellant, 




JUL? 19£9 



JOINT CHECKER LABOR RELATIONS COMMITTEE, 
SAN FRANCISCO, an unincorporated association, 
PACIFIC MARITIME ASSOCIATION, an unincorporated 
association, ILWU, an unincorporated labor union, 
ILWU, LOCAL 34, an unincorporated labor union, 
MATSON TERMINALS, INC. , a California corporation, 
et al. , 

Appellees. 



On Appeal from the United States District Court 
For the Northern District of California 
Southern Division 



SUGGESTION THAT REHEARING BE CONSIDERED 
IN FULL COURT -RULE 35 (REHEARING IN BANC) 



PETITION FOR REHEARING 



HOWARD B. CRITTENDEN, JR, 
HI Sutter Street, Suite 817 
San Francisco, California 94104 
EXbrook 7-5288 

Attorney for Appellant 



,^Q 



TO THE HONORABLE UNITED STATES COURT OF APPEALS, 
NINTH CIRCUIT: 

The appellant, RUSSELL LAW, herewith suggests it is 
appropriate: 

1) The rehearing in this matter be considered by the full 
Court under Rule 35 as a rehearing in banc, 

a) as it is necessary to obtain a uniformity of decisions; 

b) as this case involves a question of exceptional im- 
importance. 

Z) The important facts appearing in the record and stated 
with citations to the record in Appellant's Opening and Reply Briefs 
and the points of law raised were overlooked in the opinion published 
by this Court, and appellant petitions for a rehearing of the decision 
of June 18, 1969. The following facts do not appear in the opinion: 

LAW was barred from his livelihood of over 9-1/2 years and 
his sole means of support as a full time shipclerk upon a trial in 
absentia, without notice or hearing or an opportunity to appear or de- 
fend himself or present his side, upon the charge of only one of over 
a hundred shipclerk employers in this Port. He sought every remedy 
and was refused it. He filed this Sec. 301 action. 

The record shows LAW was dispatched for a single day to 
Matson Terminal, Inc. as a shipclerk and worked as such loading the 
S. S. Dant on November 23, 1964, and was paid for only 7-1/2 hours, 
not for the 8 hours he worked. He took up this pay shortage and 
sought throughout to exhaust his remedy, without so much as a hearing 
at any stage. On December 3, 1964, the Matson Terminals had this 



employer's association PMA forward charges to defendant Local 34 
(of which LAW was not a member). Local 34 sent a copy to a former 
address of his, although he had lived in his home for several years 
and his correct address was shown on several yearly W-Z forms and 
his checks to the Union for their charges carried his proper address, 
and the Union elected dispatcher at the Oakland Hiring Hall had his 
telephone number and saw him daily. 

On January 13, 1965, LAW was sent by the dispatcher to the 
Union Hall at San Francisco where he met with a local Union Committee 
for but a few minutes and was told of the charges of Matson Terminal. 
The record shows the brevity of the conference and the individual members 
testimony shows the differences of their understanding as to what LAW 
explained had happened. He was led to believe these union members in- 
tended to protect him and fight his cause. The first step in the grievance 
procedure is the defendant, Joint Checker Labor Relations Committee, in 
which both the employer representatives and the employee representatives 
each must agree for there to be any conviction of LAW, or any action. 

On January 13, 1965, one of these Union members, HERMAN, 
stated to the Port Committee of which he was an employee member, that 
LAW admitted the charges as factual, although the other Union members 
of the Committee as for example ROBB testified he understood there was 
some kind of mistake in loading when LAW was trying to follow the direc- 
tion of his supervisor, LAW discovered the mistake, reported it and it 
was corrected. Although it took both votes of the employer and employee 
members, the testimony was the Union members did not vote and ac- 
quiesced in LAW being convicted and barred from any future employment 



as a shipclerk by any of the more than a hundred employees of ship- 
clerks in this Port. 

There was clearly a violation of the duty of the exclusive 
statutory bargaining agents to LAW and actionable under Vaca v. Sipes, 
386 U.S. 171, in a Sec. 301 action. This statutory agent, the defendant 
I. L. W. U. , did nothing, at any time. It purported to delegate its discre- 
tion and judgment as well as responsibility to defendant Local 34 whose 
book members alone elected the Port Committee employee representatives 
and even the dispatcher who gave out the jobs. 

The record clearly points up the situation: 

1) Local 34 book members are those "registered" and who are 
then dispatched in priority to those such as LAW who are not permitted 
full book membership. Book men are dispatched for the duration of the 
job while the Ship is in Port while LAW and other "social security men" 
(book men have registration and registration members and non-union men 
are listed by social security numbers) have but a dispatch for a single 
day. Not only do Union members alone elect the dispatcher who gives 
out the job but also the employee member of defendant Port Committee. 
Fringe benefits are generated on all employee's pay by individual enn- 
ployers but used solely for full book members of Local 34, not for LAW 
and the other social security men. 

2) The provisions of the written collective bargaining agreement 
as published are not followed. Secret oral understandings, customs from 
breaches of this published written contract and undisclosed actions of the 
various committees are enforced as the bargaining agreement. This case 
points up the fact an unpublished and yet unsigned document as to employer' 



k 



grievances against individual shipclerks had been applied for several 
years in such matters. This document was not signed or published 
until the latter half of 1966, long after LAW'S matter. Had it been 
applied to him, he could not have been adjudicated guilty as it ap- 
plied to offences of pilfering, work stoppage, etc. , not mere errors 
in judgment or negligence. 

3) A different procedure was applied to Union book men than 
applied to social security (non-Union) men on employer grievances 
against individual shipclerks. 

4) Even the minutes of the defendant Committee recites that 
since LAW was a social security man, the defendant PMA demanded 
his punishment be permanent barring from dispatch. Although this 
harsh punishment was rarely applied, it shows a different standard 
applied to Union and non-Union shipclerks. 

5) The laws of Congress have attempted to prevent a dif- 
ferent treatment of Union and non-Union employees and spell out 
clearly the maintenance of membership provisions, and require a 
Union to accept all employees to full membership if they pay reason- 
able initiation fees and keep up their dues, if there are any provisions 
as to maintenance of membership in the contract. No employer can 
favor nor can a Union require him to favor, one employee over another 
because of Union membership or lack of it. The PMA and 1. L. W. U. 
until 1952 had a provision in this bargaining agreement granting pre- 
ference of employment and dispatch to Union members. This was held 
illegal and void m NLRB v. Waterfront Employer , 9 Cir , 211 F 2d 946. 
To avoid and frustrate this decision, the PMA and I. L. W. U. made 



another contract granting preference in employment and dispatch to 
those illegally registered and picked a seemingly innocent priority 
date of employment in 1952 before the N. L. R. B. decision. They 
also wrote into the contract that "registration" which is the key 
to this special benefit would be granted on the "joint consent" of 
the PMA and the Union. Of course, only slightly over half of the 
regular working force are then admitted into the local Union as full 
book members and, of course, only full book Union members are 
fully registered. Thus, on the waterfront book men mean "registered" 
which is the key to priority of dispatch and employment, receipt of 
fringe benefits including the jointly construed Health and Welfare Fund, 
Pension Fund and the multimillion dollar Mechanization Fund, and even 
vacation pay. The Union keeps its doors closed to all but a select few. 
Where there is selection, the bourgeois (of which LAW is one as the 
record shows he was formerly in the used car business on his own 
account) are not admitted to a predominantely proletarian Union. Even 
the grievance procedure varies depending on whether the shipclerk is 
a full book member of the Union, as does the consequences. 

6) Whether or not LAW'S conduct on November 23, 1964 in 
his shipclerk's work on loading the Dant merits discipline under the 
applicable collective bargaining agreement depends on what that agree- 
ment is. This Court's decision, as does the trial court's decision, 
completely avoids this. In any event, no man can be tried in absentia 
without adequate notice of the charges and without an opportunity to 
defend himself. Any grievance procedure cut from this material is 
too foreign to our concept of fair play to stand. See Humphry v. Moore , 



375 U. S. 335. Any statutory collective bargaining agent who dele- 
gates its responsibility and judgment to another and which in this 
case is Local 34, leaves the protection of non-Union employees to 
such as appears in this record of a deseltory, deceptive and improper 
representation, as shown in the record where the various Union mem- 
bers understood LAW'S explanation differently, in but a few minutes 
of meeting with him, promised to protect him and defend him and 
represent him and then went in and in fact voted against him. For 
the Committee to be able to act, it needed both the employer repre- 
sentative's vote and the employee's members vote. 

ADDITIONAL MATTERS 



It may well be that a non-Union shipclerk is, as respondent's 
counsel stated at the oral argument, a third-class citizen. He may 
have no rights the employer or Union or statutory exclusive bargaining 
agent are bound to respect. However, he is not outlawed and civilly 
dead. He should have a right to come to this Court and have the rele- 
vant facts as stated in the record and cited in his counsel's brief in- 
cluded in the Court's opinion. If, on the matter of law on these facts, 
the Court does not agree in whole or in part, it should so state the law 
involved: 

1) Is it the law a non-Union shipclerk solely because he is not 
admitted to Union book membership is to be subject to different grievance 
procedures? Different and more harsh punishment? 

2) May any shipclerk be subject to trial in absentia, without 
adequate notice, without an opportunity to appear and defend himself and 



be forever barred from his sole means of support of many years? 

3) May a shipclerk be called into a Union Committee 
meeting for fifteen minutes, so short that the various committee 
members each understood it differently, be told he is not to blame 
and he would be defended and protected, and then have these same 
committee men go into a meeting of another committee and then 
permit him to be convicted and to have a vlid action of that com- 
mittee, join in barring him from the sole source of his livelihood, 
in the first step of the grievance procedure? When he attempts to 
seek the next step can he be denied all other remedies? Is this 
fair and adequate representation by the exclusive statutory bargaining 
agent? 

4) May a collective bargaining agreement make full book 
members of Local 34 superior first-class citizens, let the Union 
arbitrarily close its doors to about half of the full time working 
force dependent on employment as shipclerks for a livelihood, 
require "registration" to be by "mutal consent" of the employer's 
association and the local Union, so only full book Union members 
in this working force have priority of dispatch and employment as 
"registered", get the sole benefit of all fringe benefits and priority 
of treatment in grievance; provide for election of the dispatcher and 
representatives on the Port Committee solely by full book members, 
not by all of the full time members of the working force? 

5) Can the collective bargaining agreement be so drafted as 
to perpetuate this special privilege to Union full book members not 
granted to others? 



6) Can a written collective bargaining agreement be published, 
and then have the Union and Employers Association claim this is not 

in effect, but is superceded by and the real bargaining agreement is 
a secret oral agreement not yet reduced to writing and not yet published, 
changed by custom and practices in violation of the written published 
agreement and by rainutes of the various committees, creatures of the 
written agreement? What is the applicable contract? Which grievance 
procedure is followed? As to shipclerks discipline and punishment on 
employer's grievances, which is applicable? 

7) How far can non-Union employees be treated differently 

than full book members of the Union without violating the laws of Congress 
on maintenance of Union membership or preference of one over another 
because of lack of a particular Union's membership? 

The bound law reports are full of cases where eminent counsel 
believed the law different and the appellate court got the last guess. 
No complaint can be made if the Court states the law as it sees it. 
To avoid stating the material facts and to not mention the points of law 
raised by them goes to the very right of a litigant to a review on appeal. 

This is a very difficult petition to write. The first impression 
was to roll with the times and save the trouble of a petition. However, 
counsel's obligation is to present his clients cause to the best of his 
ability. He would be timerous were he to avoid his duty to this Court 
and to his client. To avoid this difficult duty would mark counsel with 
the moral decay so apparent from the lack of security manifested in 
the turmoil and lawlessness shocking our society. 



The facts in the record and the points of law raised by them 
in this appeal goes to the very essence of our concepts of justice, 
grievance procedures and collective bargaining agreements. It is 
important to non- Union shipclerks that they have a Sec. 301 action 
when their livelihood is involved. It is important that the appellant 
have the facts in the record fully stated and the law raised by the 
facts decided. 

We urge this as a matter of exceptional importance requiring 
a consideration by the full Court to secure and maintain a uniformity 
of decisions. 





Attorney for Appellant 



CERTIFICATE OF COUNSEL 



I, HOWARD B. CRITTENDEN, JR. , do hereby certify that the 
foregoing petition for rehearing and suggestion under Rule 35 in this 
cause is presented in good faith and not for the purpose of delay. 




/ y ^^^' - ^go/^R^D B. CRlTTL^Nl^ ^ N. JR. 



/ 




No. 22528 



IN THE UNITED STATES COURT OP APPEALS 
FOR THE NINTH CIRCUIT 



JAMES 0, RUSSELL, 

Appellant, 

V. 

PAUL H. NITZE, Secretary of the Navy, 

Appellee . 




ON APPEAL PROM THE UNITED STATES DISTRICT 
COURT POR THE DISTRICT OP IDAHO 



SUPPLEMElfPARY MEMORANDUM 



WILLIAM D. RUCKELSHAUS, 

Assistant Attorney General , 

J. P. BATES, 
United States Attorney , 

CARL EARDLEY, 
Deputy Assistant Attorney General , 

MORTON HOLLANDER, 
ROBERT M. HEIER, 

Attorneys, 

Department of Justice , 

Washington, T>.C, S?0^30 . 



F 



JUN9 iyo9 
WM. B. LUCK, CLERK 



IN THE UNITED STATES COURT OP APPEALS 
FOR THE NINTH CIRCUIT 



No. 22528 

JAMES G. RUSSELL, 

Appellant, 

V. 

PAUL H. NITZE, Secretary of the Navy, 

Appellee . 



ON APPEAL PROM THE UNITED STATES DISTRICT 
COURT POR THE DISTRICT OF IDAHO 



SUPPLEMENTARY MEMORANDUM 



This supplementary memorandum is submitted pursuant to 
the Court's request, made during oral argument on May 16, 1969. 
On pages 2 to 8 we have set forth the Navy Regulations in 
force in 1963^ the time of the events in question. 

In connection with the Secretary's contention that Russell 

1/ 

has not exhausted his administrative remedies the Court 

inquired whether Mr. Russell, at this late date, still may 
have review before the Board for the Correction of Naval 
Records. At page 9 of this memorandum we set out the full 
text of a letter from the Department of the Navy dated May 21, 
1969, and stating that "Mr. Russell is now privileged to 



1/ See Craycroft v. Ferrall , C. A. 9, Dkt. No. 22,582, decided 
Rarch 5, 19t>9. 



petition the Board for Correction of Naval Records to review 

his case.". 

REGULATIONS INVOLVED 

Navy Regulations, amended as of January 23, I963, and in 

effect upon the dates in question, provide in relevant part: 

32 C.P.R. 730.12 Discharge of enlisted personnel 

by reason of unfitness. 

(a) Enlisted personnel may be separated by 
reason of unfitness with an undesirable discharge 

or with a higher type discharge when it is warranted 
by the particular circumstances in a given case. 
A discharge by reason of unfitness, regardless of 
the attendant circumstances, will be effected only 
when directed by or authorized by the Chief of Naval 
Personnel. The provisions of this section are not 
to be used as a substitute for action under the 
Uniform Code of Military Justice (10 U.S.C. 8OI- 
940). Therefore, discharge by reason of unfitness 
will not be issued in lieu of disciplinary action 
except upon the determination by the Chief of 
Naval Personnel that the Interests of the service 
as well as the individual will best be served by 
administrative discharge. Accordingly, discharge 
by reason of unfitness normally will not be recom- 
mended in lieu of disciplinary action. 

(b) An enlisted person may be recommended 
for discharge by reason of unfitness to free the 
service of persons whose military record is 
.characterized by one or more of the following: 

(1) Frequent Involvement of a 
discreditable nature with civil or military 
authorities. 

(2) Sexual perversion Including but 
not limited to (l) lewd and lascivious acts, 
(11) homosexual acts, (ill) sodomy, (iv) 
indecent exposure, (v) Indecent acts with 
or assault upon a child under age I6, or 
(vi) other indecent acts or offenses. 

(3) Drug addiction or the unauthor- 
ized use or possession of habit-forming 
narcotic drugs or marijuana. 



- 2 - 



{H) An established pattern for shirk- 
ing. 

(5) An eatabllshed pattern showing 
dishonorable failure to pay Just debts. 

(6) Other good and sufficient reasons, 
as determined by tie Chief of Naval Personnel. 

(c) In each case processed In accordance with 
this section, the Individual Is subject to an unde- 
sirable discharge and therefore the following Is 
required: 

(1) The Individual must be Informed 
In writing of the reason(8) for which he 
Is being considered for discharge. 

(2) The Individual must be afforded 
an opportunity to submit In writing a re- 
quest for or a waiver of the privileges set 
forth In § 730.14(c). 

(d) Attention Is direction to § 730.14 which 
prescribes the detailed procedure for submission of 
reports and recommendations for discharge by reason 
of unfitness. 

(e) Enlisted personnel, except those processed 
under paragraph (b)(2) of this section, shall be 
retained on board pending receipt of Instructions 
from the Chief of Naval Personnel. 

(f) Enlisted personnel serving on board ships, 
overseas stations, and continental U.S. activities 
lacking separation facilities who are recommended for 
discharge In accordance with paragraph (b)(2) of 
this section may be transferred to the nearest 
continental U.S. separation activity to await In- 
structions from the Chief of Naval Personnel. The 
transfer orders and records must accurately reflect 
the person's status and reason for transfer In 
order to ensure that the Individual Is held pending 
receipt of the Instructions from the Chief of Naval 
Personnel . In this connection, a complete copy 

of the papers forwarded to the Chief of Naval Per- 
sonnel shall be filed In the Individual's service 
record . 



- 3 - 



32 C.P.R. 730.1'! Preparation of brief form and 

other documents required under 
§§ 730.10, 730.12, and 730.13. 

(a) The cases of enlisted personnel under 
consideration for discharge by reason of unsult- 
ablllty, unfitness, or misconduct under § § 730.10, 
730.12, or 730.13 respectively shall be prepared 

as set forth herein. Commanding officers shall 
ensure that complete and carefully prepared briefs 
are submitted and that the Instructions In this 
section are scrupulously adhered to. 

(b) An enlisted person being considered for 
a discharge by reason of unsultablllty shall be 
Informed as to the circumstances which are the 
basis for the contemplated action and shall be 
afforded an opportunity to make a statement In 
his own behalf. 

(c) An enlisted person who Is subject to 
undesirable discharge by reason of unfitness under 
§ 730.12 or by reason of misconduct under § 730.13 
shall. If his whereabouts Is known, be Informed 

as to the circumstances which are the basis for 
the contemplated action and afforded an opportunity 
to request or waive. In writing, any or all of the 
following privileges: 

(1) To have his case heard by a 
board of not less than three officers. 

(2) To appear In person before such 
board (unless In civil confinement or 
otherwise unavailable), 

(3) To be represented by counsel who. 
If reasonably available, should be a lawyer. 

(4) To submit statements In his own 
behalf. 

If the Individual submits a written request to have 
his case heard by a field board of officers, the com- 
manding officer shall convene an administrative 
board In accordance with § 730.15. The recorder 
for the field board shall be furnished with the 
completed brief of the case (paragraph (g) or (h) 
of this section), as appropriate, and the service 
record of the Individual concerned. 



- 4 - 



(d) Those cases processed under § 730.12 or 
§ 730.13 wherein the Individual waives or does not 
request field board action and those cases wherein 
the Individual Is processed under § 730.IO shall 
be forwarded, together with all pertinent papers, 
direct to the Chief of Naval Personnel to final 
action. 

(e) When discharge under § 730.10 or § 730.12 
Is contemplated, a brief shall be prepared In the 
format of Exhibit 1 (see paragraph (g) of this 
section) In accordance with the following Instruc- 
tions: 

(1) Summary of military offenses . 
List In chronological order all dlsclpll- 
nary action during current enlistment . 
Include service record entry page numbers, 
date of non-Judlclal punishment or court- 
martial by type, description of offense(s), 
non- Judicial punishment or sentence as approved 
and approval data, and all violations of brig 

or retraining command regulations during cur- 
rent confinement with action taken thereon. 

(2) Unclean habits. If any . Substan- 
tiate all unclean habits Including the 
occurrence of repeated venereal disease 
Infections during the current enlistment. 
When reporting venereal diseases. Indicate 
the date of each admission and nature of 
the Infection. 



(3) Civil conviction. If any, ( 
1 of Information contained In th^ 



on the 

basis of Information contained In the ser- 
vice record or otherwise readily available. 
List date and court In which convicted, 
offense, and sentence awarded. 



(^) Enclosures . (l) Individual's 
signed statement In own behalf. If an 
undesirable discharge Is being considered, 
statement should Include, "I have been 
advised that I may be discharged under 
other than honorable conditions and the basis 
therefor. I understand such discharge may 
deprive me of virtually all veterans' bene- 
fits based upon my current period of active 
service, and that I may expect to encounter 
substantial prejudice In civilian life In 
situations wherein the type of service 
rendered In any branch of the Armed Forces 
or the character of the dlscliarge received 

- 5 - 



therefrom may have a bearing. In 
regard thereto, I desire to make the 
following Btatement ..." If the 
Individual refuses to make or sign a 
statement, a page 13 service record 
entry to that effect should be enclosed. 
(11) Copy of page 9 of the service record, 
(ill) Individual's signed request for 
or waiver of privileges outlined in para- 
graph (c) of this section. (Note that I 
this requirement does not apply to cases J 
processed under § 730.10.) 
(Iv) Other pertinent documents such 
as psychiatric or medical evaluation \ 
(especially in aberrant sexual behavior k 
cases), police report, etc. 
(v) Comment and recommendation of com- 
manding officer and/or his concurrence 
or nonconcurrence if case is heard by a 
field board. If the commanding officer 
contemplates recommending a less favor- 
able disposition than that proposed by 
the field board or If the pertinent 
section ( § 730.12 or § 730.13) permits 
a less favorable disposition than that 
proposed by the field board, the command- 
ing officer shall inform the individual 
accordingly and afford him an opportunity 
to submit such additional statement as he 
desires in an effort to show cause why a 
less favorable action should not be 
finally taken. 

(f) When a case is processed under § 730.13* a 
brief shall be prepared in the format of Exhibit 2 
(see paragraph (h) of this section), in accordance 
with the following instructions: 

(1) Circumstances of offense (s) in 
detail . Include a brief resume of the 
circumstances surrounding the offense and 
the pertinent dates. 

(2) Action of civil authorities . In- 
clude citation of any civil statute(s) vio- 
lated, charge on which tried and convicted, 
court in which convicted, and maximum 
punishment which could have been imposed 
for such a conviction under the UCMJ 
(Uniform Code of Military Justice), D.C. 
Code, or Title l8, U.S. Code as applicable 
(see § 730.13). 

- 6 - 



(3) Previous civil convictions. If any , 
on the basis of Information contained In the 
service record or otherwise readily available. 
List date and court In which convicted, offense, 
and sentence awarded. 

(4) Summary of military offenses. If any . 
List In chronological order all disciplinary 
action during current enlistment . Include 
service record entry page numbers, date of non- 
judicial punishment or court-martial by type, 
description of offense(s), non- Judicial punish- 
ment or sentence as approved and date of approval, 
and all violations of brig or retraining command 
regulations during current confinement with action 
taken thereon. 

(5) Remarks . Include location of Individual's 
records, any unauthorized absence Involved, and 
disciplinary action taken or pending. Identification 
of any other military personnel Involved In the 
case, etc. 

(6) Enclosures , (l) Individual's signed 
statement In own behalf. All such statements 
should Include, "I have been advised that I 
may be discharged under other than honorable 
conditions and the basis therefor. I understand 
such discharge may deprive me of virtually all 
veterans' benefits based upon my current period 
of active service, and that I may expect to 
encounter substantial prejudice In civilian 
life In situations wherein the t3rpe of service 
rendered In any branch of the Armed Forces or 
the character of discharge received therefrom 
may have a bearing. In regard thereto, I 
desire to make the following statement * * ♦" . 
If statement cannot be obtained, or If the 
Individual refuses to make or sign a statement, 
a page 13 service record entry to that effect 
should be enclosed. 

(11) Statement of witnesses, arrest 
reports, copies of court records, probation 
orders, or any other pertinent documents. 

(ill) Copy of page 9 of the service 
record . 

(Iv) Individual's signed request for 
or waiver of privileges outlined In paragraph 
(c) of this section. If such request cannot 
be obtained. Include Information relative 
to the attempt made to get the request. 

- 7 - 



(v) Conunent and recommendation of 
commanding officer and/or concurrence or 
non-concurrence If case Is heard by a field 
board. If the commanding officer contemplates 
recommending a less favorable disposition 
than that proposed by the field board or If 
the pertinent section (§ 730.12 or § 730.13) 
permits a less favorable disposition than that 
proposed by the field board, the commanding 
officer shall Inform the Individual accordingly 
and afford hire an opportunity to submit such 
additional statement as he desires In an effort 
to show cause why a less favorable action should 
not be finally taken. 

(g) Exhibit 1: Brief concerning Individuals 
processed under (check one). 



- 8 - 




LETTER PROM THE DEPARTMENT OP THE NAVY 
DEPARTMENT Or THE NAVY 

BOARD FOR CORRECTION OF NAVAL RECORDS 
WASHINGTON. DC 20370 

CEC:mas 

21 May 1969 



Honorable William D. Buckelshaus 
Assistant Attorney General 
Civil Division 
Department of Justice 
Washington, D. C. 20530 

Attention: Mr. Morton Hollander 

Chief, Appellate Section 

Ee: James G. Bussell v. Nitze 



Dear Sir: 



This is in response to your telephonic inquiry requesting information as 
to the jurisdiction of the Board for Correction of Naval Records to re- 
view the case of Mr. James G. Russell, a former member of the naval serv- 
ice. 

Department of the Navy records show that Mr. Russell was discharged on 
29 July 1963 with an undesirable discharge. Diereafter, pursuant to the 
provisions of 10 USC 1553, he petitioned the Navy Discheirge Review Board 
to review his case with the view to changing the undesirable discharge, 
and on 19 September 1966 the Secretary of the Navy approved that Board's 
decision that the undesirable discharge not be changed. 

Mr. Russell is now privileged to petition the Board for Correction of 
Naval Records to review his case. The law under which the Board operates, 
10 IBC 1552, and its in^jlementing regulations, provide that the applica- 
tion, DD Form 1^9, should be filed within three years after discovery of 
the alleged error or injustice, but a failure to so file may be excused 
by the Board if it finds it would be in the interest of justice to do so. 
Mr. Russell may file within three years of the Navy Discharge Review Board's 
denial, 18 September 1969. In the event he files after that date, he should 
sutanit such reasons as he may have for not filing sooner in order that such 
reasons may be considered by the Board in determining whether or not it 
should excuse the failure to file within three years. 

I am enclosing a copy of the standard form application, DD 1^9 > «uid a copy 
■of the Board's regulations. 

Sincerely yours, 

/CHARLES E. CURLEY 
Executive Secretary 



Ends 



- 9 - 



Respectfully submitted, 

WILLIAM D. RUCKELSHAUS, 

Assistant Attorney General , 

J. P. BATES, 

United States Attorney, 

CARL EARDLEY, 

Deputy Assistant Attorney General , 

MORTON HOLLANDER, 

ROBERT M. HEIER, 
Attorneys , 

Department of Justice, 
Washington, D.C. 20^30 . 

JUNE 1969. 

CERTIFICATE OP SERVICE 

I hereby certify that on June ^ , 1969, I served the 

foregoing Supplementary Memorandum of the appellee Paul H. 

Nltze, Secretary of the Navy, by mailing three copies, postage 

prepaid, air mall, to counsel for appellant: 

Cecil D. Hobdey, Esquire 
James, Hobdey & Shaw 
Box 176 
Qoodlng, Idaho 83330 




Attorney for Appellee . 



- 10 - 

G P 8 60 -0 I 5 




EIUED 

Jb'N 1 2 1950 



WM E mCK CLERK 

IN THE UNITED STATES COURT OF APPEALS 



FOR THE NINTH CIRCUIT 



^MES RILEY, JR. 


and ) 


RANK MARSHALL 


> / 




Appellants, ) 


vs. 


\ 


^ITED STATES OF AMERICA, ) 




Appellees. - ) 
) 



/ 



'^N 16^,999 



No. 2 2 5 11 



PETITION FOR REHEARING 



COMES NOW the Appellant JAMES RILEY, JR. , and pursuant 
' Rule 40 (a) of the Rules of Appellate Procedure, herewith submits this 
Jtition for Rehearing of the Opinion filed May 28, 1969, in this Court, affirm- 
g his conviction, the subject of the above-entitled Appeal by said Appellant. 

The following points are suggested for rehearing: 

1. The Court's conclusion that the informer was shown to have 
len reliable Appellant submits was not warranted by credible evidence. 

2. That the trial Court's failure to require disclosure of the 
entity of the informer inhibited Appellant from testing by cross-examination 



e extent of the claimed reliability. 



.9. 



3. That the failure to require disclosure of identity was error 
)ecause Appellant was deprived of any opportunity to question the informer on 
lis part in planting the drugs on either of the Appellants or in some convey- 
ince or sack, etc. , of theirs, which drugs later were discovered in the state 
vehicle, 

4. That the Court misunderstood one portion of Appellant's 
;laim of lack of probable cause in that Appellant has argued and raised the point 
:hat prior to actual discovery of the drugs in the sack mysteriously in the 

5tate vehicle, the apparent tips of the informer had proven unreliable (witness 
:he results of the July 5 search). Thus, there was no serious and substantial 
Drobable cause for the arrest of Appellant in the state vehicle, which arrest 
resulted when he was first taken into technical custody, before discovery of 
:he sack with the drugs. 

5. That the Court did not discuss or resolve the issue of aban- 
ioned property in connection with the discovery of the sack. 

1 6. That there was no showing by Appellee that Appellant had 

Deen in the company of known narcotic dealers; only vague references thereto 
in the transcript, and certainly no showing that Appellant himself knew that 
:hey were such. 

7. That the Court over -emphasized the off-hand testimony of 
:he officer that he did not see any drugs in the back seat of the state vehicle 



-3- 

before Riley sat in it. Actually, from the testimony it is apparent that the 
officer did not make a special point of so noticing or searching. 

8. That because of the complete lack of bona fide probable 
cause for the arrest, Appellant RILEY 's claimed statemei.. should have been 
inadmissible, and its occurrence not a portion of this Court's opinion. 

9. That there was no showing by Appellee that the life of the 
informer would have been in jeopardy by requiring disclosure of his identity. 

10. That the Court has overlooked the argument of Appellant 
that the actual discovery of the narcotics at bar was not made until after 
both Appellants had been out of the vehicle and in the state building for some 
period of time. Thus, any theory of constructive joint possession is com- 
pletely discredited as a matter of law because of the lapse during which a 
third party could have planted the drugs. The record shows that there was 
not a steady and complete surveillance of the vehicle at all times during 
this interval. 

11. That the Q)urt overlooked the holding of Ao-uilar vs. Texas , 
378 U. S. 108, 84 S. Ct. 1509, discussed in the briefs of Appellants, which 
requires information of an informant to be based upon personal knowledge of 
the informer, as applied to the facts of this case. 

WHEREFORE, it is respectfully requested that the Court rehear 
this matter and issue its Order reversing the judgment as to your Appellant. 



•4- 



Dated this /O day of June, 1969. 



Law Offices of WILLIAM T. HEALY 
1009 Tucson Federal Savings Tower 
32 North Stone Avenue 
Tucson, Arizona 



[/Lyu/^c. 




WILLIAM T. HEALY 
Attorney for Appellant 



/ 



STATE OF ARIZONA 
COUNTY OF PIMA 



) 



ss. 



CERTIFICATE OF SERVICE 



WILLIAM T, HEALY, being first duly sworn, deposes and 
says: That he delivered to the office of the United States Attorney at the 
Federal Building, Tucson, Arizona, three copies of the within Petition for 
Rehearing and served same upon said United States Attorney on the /O day 
of June, 1969. 



/..■ 



--^ \ — . ^ 

WILLIAM T. HEALY 



SUBSCRIBED AND SWORN TO before me this /O day of 



June, 1969. 





Nptary Public 



My Commission Expires: 
February 1, 1971 



NO. 2 2 5 5 6' 
IN THE UNITED STATES COURT OF APPEALS 
FOR THE NINTH CIRCUIT 



NORVIN E. POWELL, III, 

Appellant, 
vs. 

UNITED STATES OF AMERICA, 

Appellee. 



/y 



APPELLEE'S BRIEF 



FILED 

JUN161969 
WM. B. LUCK, CLERK 



APPEAL FROM 
THE UNITED STATES DISTRICT COURT 
FOR THE CENTRAL DISTRICT OF CALIFORNIA 



WM. MATTHEW BYRNE, JR. 
United States Attorney 

ROBERT L. BROSIO 

Assistant U. S. Attorney 
Chief, Criminal Division 

JAMES E. SHEKOYAN 

Assistant U. S. Attorney 

1200 United States Court House 

312 North Spring Street 

Los Angeles, California 90012 

688-2414 

Attorneys for Appellee 
United States of America 



NO. 2 2 5 5 6 

IN THE UNITED STATES COURT OF APPEALS 

FOR THE NINTH CIRCUIT 

NORVIN E. POWELL, III, 

Appellant, 
vs. 
UNITED STATES OF AMERICA, 

Appellee. 



APPELLEE'S BRIEF 



APPEAL FROM 
THE UNITED STATES DISTRICT COURT 
FOR THE CENTRAL DISTRICT OF CALIFORNIA 



WM. MATTHEW BYRNE, JR. 
United States Attorney 

ROBERT L. BROSIO 

Assistant U. S. Attorney 
Chief, Criminal Division 

JAMES E. SHEKOYAN 

Assistant U. S. Attorney 

1200 United States Court House 

312 North Spring Street 

Los Angeles, California 90012 

688-2414 

Attorneys for Appellee 
United States of America 



TOPICAL INDEX 

Table of Authorities 

I JURISDICTIONAL STATEMENT 

II STATUTES INVOLVED 

III STATEMENT OF THE CASE 

IV STATEMENT OF FACTS 

V ARGUMENT 

A. THE TRIAL COURT JUDGE MAY 
PROPERLY COMMENT TO THE 
JURY ON THE CREDIBILITY OF 
WITNESSES. 

B. THE TRIAL COURT JUDGE MAY 
PROPERLY ASK QUESTIONS OF 

WITNESSES. 



Page 
ii 
1 
2 
3 
5 
9 



11 



C. ALLOWING MARIHUANA ADMITTED 
INTO EVIDENCE TO GO TO JURY 
ROOM DOES NOT CONSTITUTE 
PREJUDICIAL ERROR. 13 

D. THE TRIAL COURT DID NOT ABUSE 
ITS DISCRETION IN DENYING 
POWELL'S MOTION FOR A CONTIN- 
UANCE OF THE TRIAL. 14 

E. THE USE OF INFORMANTS BY 
FEDERAL NARCOTICS AGENT TO 
APPREHEND VIOLATORS OF 

NARCOTICS LAW IS PERMISSIBLE. 16 

F. THE INSTRUCTION TO THE JURY OF 
§4744(a) OF TITLE 26, UNITED STATES 
CODE, DOES NOT CONSTITUTE 
REVERSIBLE ERROR. 17 

G. IT IS NOT NECESSARY TO CONSIDER 
THE VALIDITY OF POWELL'S CON- 
VICTIONS ON COUNTS ONE, TWO, 

FOUR AND FIVE OF THE INDICTMENT. 18 

VI CONCLUSION 20 



TABLE OF AUTHORITIES 

Cases Page 

Blunt V. United States, 

404 F. 2d 1283 (D. C.Cir. 1968) 19 

CoUozo V. United States, 

370 F. 2d 316 (9th Cir. 1966) 12 

Cooper V. United States, 

282 F. 2d 527 (9th Cir. 1960) 18 

Eason v. Dickson, 

390 F. 2d 585 (9th Cir. 1968) 12 

Evalt V. United States, 

382 F. 2d 424 (9th Cir. 1967) 15 

Fletcher v. United States, 

313 F. 2d 137 (9th Cir. 1963), 

cert, denied 374 U. S. 812(1963) 10, 11 

Gilbert v. United States, 

307 F. 2d 322 (9th Cir. 1962) 12 

Gonzales v. United States, 

251 F. 2d 298 (9th Cir. 1958) 17 

Hebets v. Scott, 

152 F. 2d 739 (9th Cir. 1945) 12 

Henry v. United States, 

186 F. 2d 521 (9th Cir. 1951) 10 

Hirabayashi v. United States, 

320 U. S. 81 (1943) 19 

Honce v. United States, 

299 F. 2d 389 (8th Cir. 1962) 10 

Johnson v. United States, 

318 U. S. 189 (1943) 12 

Kuhl V. United States, 

370 F. 2d 20 (9th Cir. 1966) 17 

Lawn V. United States, 

355 U.S. 339 (1958) 19 

Leary v. United States, 

U.S. (1969) 19 

ii. 



Page 
Lemons v. United States, 

337 F. 2d 619 (9th Cir. 1964) 15 

Masciole v. United States, 

356 U.S. 386 (1958) 16 

Miller v. United States, 

351 F. 2d 598 (9th Cir. 1965), 

cert, denied 382 U.S. 1027(1965) 15 

Morgan v. United States, 

380 F. 2d 686 (9th Cir. 1967) 15 

Noah V. United States, 

304 F. 2d 317 (9th Cir. 1962) 19 

Russell V. United States, 

288 F. 2d 520 (9th Cir. 1961) 19 

Shayne v. United States, 

255 F. 2d 739 (9th Cir. 1958), 

cert, denied 358 U. S. 823(1958) 13 

Sherman v. United States, 

356 U.S. 369 (1958) 17 

Sherwin v. United States, 

320 F. 2d 137 (9th Cir. 1963) 19 

Singer v. United States, 

380 U. S. 24 (1965) 18 

Smith V. United States, 

305 F. 2d 197 (9th Cir. 1962), 

cert, denied Corey v. United States, 

371 U.S. 890 (1962) 10. 11 

Sorrells v. United States, 

287 U.S. 435 (1932) 1'? 

Trice v. United States, 

211 F. 2d 513 (9th Cir. 1954), 

cert, denied 348 U. S. 900(1954) 17 

United States v. Murdock, 

290 U.S. 389 (1933) 10 

Wall V. United States, 

384 F. 2d 758 (10th Cir. 1967) 13 



111. 



Page 

Whaley v. United States, ^- 

394 F. 2d 399 (10th Cir. 1968) 12 

White V. United States, 

394 F. 2d 49 (9th Cir. 1968) 18 

Williamson v. United States, 

311 F. 2d 441 (5th Cir. 1962) 16 

Statutes 

18 U. S. C. , §3231 2 

21 U.S.C. , §176(a) 2, 19 

26 U.S.C, §4742(a) 2, 3. 18, 19 

26 U.S.C. , §4744(a) 17, 13 

26 U.S.C. , ii7273(b) 3 

28 U.S.C. , §1291 2 

28 U.S.C. , §1294 2 



IV. 



L 



NO. 2 2 5 5 6 
IN THE UNITED STATES COURT OF APPEALS 
FOR THE NINTH CIRCUIT 

NORVIN E. POWELL, III, 

Appellant, 
vs. 
UNITED STATES OF AMERICA, 

Appellee. 



APPELLEE'S BRIEF 



JURISDICTIONAL STATEMENT 

On May 18, 1966, a six count indictment was returned 
against the appellant, NORVIN E. POWELL, III, by the 

Federal Grand Jury for the Southern District of California, 

1/ 
Central Division [C. T. 2].- 

The indictment charged Powell with a violation of Federal 
laws relating to the possession and sale of marihuana. 

Powell was found guilty on all six counts by a jury 
verdict on June 22, 1966 [C. T. 31]. 



y "C. T. " refers to Clerk's Transcript of Record. 

1. 



On July 12, 1966, appellant was sentenced to the custody 
of the Attorney General for five years on each of the six counts, 
with the sentences to run concurrently [C. T. 33]. 

Powell filed a timely Notice of Appeal on July 15, 1966 
[C. T. 34]. The jurisdiction of the District Court was predicated 
on Title 18, United States Code, §3231; Title 21, United States 
Code, §176(a); and Title 26, United States Code, §4742(a). This 
Court has jurisdiction under Title 28, United States Code, 
§§1291 and 1294. 

II 

STATUTES INVOLVED 

Title 21, United States Code, § 176(a) provides in 
pertinent part as follows: 

"Whoever, knowingly, with intent to defraud 
the United States, receives, conceals, buys, sells, 
or in any manner facilitates the transportation, 
concealment, or sale of such marihuana after being 
imported or brought in, knowing the same to have 
been imported or brought into the United States 
contrary to law shall be imprisoned not less than 
five or more than twenty years and, in addition, 
may be fined not more than $20, 000. 

"Whenever on trial for a violation of this 
subsection, the defendant is shown to have had the 

2. 



L 



marihuana in his possession, such possession shall 
be deemed sufficient evidence to authorize conviction 
unless the defendant explains his possession to the 
satisfaction of the jury. " 

Title 26, United States Code, §4742(a) provides in 
pertinent part as follows: 

"It shall be unlawful for any person . . . 
to transfer marihuana, except in pursuance of a ' 
written order of the person to whom such marihuana 
is transferred, on a form to be issued for that 
purpose by the Secretary or his delegate. " 

Title 26, United States Code, §7273(b) provides in 
pertinent part as follows: 

"Whoever commits an offense . . . described 
in . . . §4742(a) shall be imprisoned not less than 
five years or more than 20 years, and in addition, 
may be fined not more than $20, 000. " 



III 



STATEMENT OF THE CASE 
Powell was indicted on May 18, 1966 by the Federal Grand 
Jury for the Southern District of California, Central Division. 
Counts One and Four of the six-count indictment charged that he 

3. 



knowingly and unlawfully received, concealed, and facilitated the 
concealment and transportation of 1, 604. 1 grams of marihuana 
on April 11, 1966, and 1, 498. 25 grams of marihuana on April 27, 
1966. Counts Two and Five of the indictment charged that he 
knowingly and unlawfully sold and facilitated the sale of the afore- 
mentioned marihuana on the said dates. Counts Three and Six of 
the indictment charged that he knowingly and unlawfully sold the 
aforementioned marihuana on the said dates, without obtaining 
from the purchaser written orders on forms issued for that 
purpose by the Secretary of the Treasury [C. T. 2]. 

Trial by jury was held on June 21 and 22, 1966, before 
the Honorable William N. Goodwin, United States District Judge, 
at which time Powell was found guilty on all counts [C. T. 31]. 

On July 12, 1966, Powell was sentenced to the custody of 
the Attorney General for five years on each of the six counts, 
with the sentences on Counts Two, Three, Four, Five and Six to 
begin and run concurrently with the sentence on Count One 
[C. T. 33] . 

Powell filed a timely notice of appeal on July 15, 1966 
[C. T. 34]. 



4. 



IV 



STATEMENT OF FACTS 

On April U, 1966, an agent of the Federal Bureau of 
Narcotics, William Turnbou, went to the residence of Powell 
with a special employee of the Federal Bureau of Narcotics 
named Leroy C. Dukes, alias Abdula. Powell was not home 
when Agent Turnbou and Dukes arrived at the residence, but he 
appeared about 30 minutes later. Dukes introduced Agent 
Turnbou to Powell as the person who wanted marihuana. Agent 
Turnbou asked Powell if he could get anything other than 
marihuana. Powell responded that he could get heroin, but 
payment would have to be in advance of delivery. He also told 
Agent Turnbou that he could obtain marihuana for $50 a kilogram 

if the money was paid in advance to the "connection", who went 

2/ 
to Mexico to get the marihuana [R. T. 13-15, 190, 29]. - 

While at Powell's residence. Agent Turnbou told him he 

wanted to buy two kilograms of marihuana. Powell said the price 

would be $135 per kilogram. Agent Turnbou would not advance 

the money to him. Powell then left the residence, taking his 

bass fiddle, and returned with two packages of marihuana which 

he gave to Agent Turnbou who, in turn, gave Powell $270. The 

two of them then conversed about future transactions for the 



2_l "R. T. " refers to Reporter's Transcript of Record. 

5. 



purchase of marihuana and heroin by Agent Turnbou. Thereafter, 
Agent Turnbou and Dukes left Powell's residence [R. T. 15-16]. 

On Apeil 22, 1966, Agent Turnbou and Dukes met with 
Powell at his residence. Agent Turnbou and Powell had a 
discussion about the purchase of marihuana. Powell said he 
could not do business on that date, but would be able to in about 
a week [R. T. 17, 35]. 

At approximately 10:30 P.M. on April 27, 1966, Agent 
Turnbou and Dukes went to Powell's residence. Agent Turnbou 
told Powell he wanted two more kilograms of marihuana. 
Powell said he would have it shortly. He left his residence and 
returned about 10 minutes later with two packages of marihuana. 
Agent Turnbou then paid Powell $270. On the occasion of this 
transaction, Agent Turnbou observed Powell smoking what he 
(Powell) said was a marihuana cigar [R, T, 17-18, 37, 45]. 

Powell did not obtain from Agent Turnbou a Treasury 
order form at the time of either of the sales of marihuana 
[R. T. 20]. 

Dukes met Powell in 1965 at a club known as "Mother 
Neptune's. " Powell and Dukes both played the bass fiddle at the 
club. Dukes would go to the club almost every night and would 
usually see and talk to Powell. Dukes went to Powell's 
residence several times in late 1965. On those occasions, he 
and Powell would talk about music and narcotics [R. T. 56-59]. 

In February 1966, while Powell and Dukes were at the 
club, Powell told Dukes he could sell any amount of narcotics. 

6. 



After Dukes learned that Powell was selling narcotics, and after 
he talked to agents of the Federal Bureau of Narcotics, he asked 
Powell for a "connection" for narcotics [R. T. 61-62, 72]. 

In March 1966, Dukes went to Powell's residence several 
times. On one occasion, Powell told Dukes he was still prepared 
to sell narcotics and had "connections" if Dukes wanted "anything 
in any amount". Dukes told Powell he was not interested in 
buying narcotics [R. T. 71-72]. 

During March and April 1966, Powell was continually 
telling Dukes he had narcotics to sell. In early April 1966, Dukes 
called Powell. Powell told him he still had narcotics to .sell and 
practically forced Dukes to buy narcotics [R. T. 78-79]. 

In March 1966, Dukes told Powell he had someone who 
was interested in buying narcotics. Powell said "Okay, you get 
that party, and when you get them, make sure that they're all 
right" [R. T. 81-82], 

Four or five nights after Powell's first sale of marihuana 
to Agent Turnbou on April 11, 1966, Dukes talked to Powell at 
"Mother Neptune's". Powell said he was satisfied with what had 
happened the night of the first sale to Agent Turnbou and talked 
about a future transaction. Powell said he was ready to make 
another sale whenever Dukes was ready. Dukes conveyed this 
information to Agent Turnbou who decided to wait about one and 
a half weeks before another transaction [R. T. 99-100]. 

Dukes never used narcotics nor supplied narcotics to 
anyone [R. T, 55, 59]. He began cooperating with the Federal 

7. 



Bureau of Narcotics in November 1965, in the belief that he would 
be given consideration with respect to a charge then pending 
against him. Dukes was not promised anything for his coopera- 
tion [R. T. 75]. 

Powell testified he met Dukes in August 1965 and did not 
see him again until January 1966 at "Mother Neptune's ". 
Powell saw Dukes about a dozen times in January 1966. Powell 
had an initial discussion about narcotics with Dukes in February 
1966, in Dukes' car, at which time Dukes sniffed cocain^ and 
offered to sell cocaine to Powell [R. T. 106-110]. 

Powell testified that Dukes tried to sell narcotics to 
someone in the club in late March 1966. Several times Powell 
cautioned Dukes about to whom he sold narcotics [R. T. 114]. 

Powell did not deny the two sales of marihuana to Agent 
Turnbou on April 11, 1966 and April 27, 1966, but said that he 
was acting as the "front" for Dukes at Dukes' strong urging 
[R. T. 116-117, 127-128, 132-135, 142-143, 158]. Powell denied 
being a supplier of marihuana and denied trying to get Dukes to 
buy narcotics from him since February 1966 [R. T. 149]. 

Powell admitted that he told Agent Turnbou that he could 
supply any amount of narcotics, but claimed he only said that at 
the request of Dukes [R. T. 150]. 

Powell admitted that he told Agent Turnbou that he could 
obtain marihuana for $50 per kilogram if the money was received 
by the "connection" in advance to take with him to Mexico, but 
he claimed he only said that at the request of someone he did 

8. 



not name [R. T. 185]. 

Powell admitted marihuana convictions in 1960 and 1961 
or 1962 [R. T. 150-151]. 

V 

ARGUMENT 

A. THE TRIAL COURT JUDGE MAY PROPERLY 

COMMENT TO THE JURY ON THE 
CREDIBILITY OF WITNESSES. 

Powell contends that the trial court judge's comment to 
the jury concerning the credibility of Reynaldo Navarro, a 
witness for Powell, was prejudicial error. Navarro testified 
that he had obtained marihuana from Dukes in January 1966, 
but admitted he had told a different story when he was prosecuted 
in the State court for possession of the marihuana. Navarro 
admitted that he had talked to Powell in jail prior to testifying 
in this case [R. T. 120-125]. The trial court judge told the 
jury it was his opinion that Navarro's testimony was not worthy 
of belief. However, prior to such comment, the judge 
instructed the jury that any comments he made were only 
expressions of his own opinion as to the facts, and the jury 
could disregard them entirely, since the jurors were the sole 
judges of the facts [R. T. 205]. Later, the trial court judge 
repeated his admonition to the jury that they were the sole 
judges of the facts and of the credibility of the witnesses who 
had testified in the case [R. T. 209]. 

9. 



I 



No objection was made by Powell to the judge'-s comments 
[R. T. 224]. 

The United States Supreme Court and this Court have 
repeatedly upheld the right of a trial court judge to comment on 
the credibility of witnesses, provided the comment is fair and 
the jury is clearly instructed that they are the sole judges of 
the facts and may disregard such comments. 

United States v. Murdock , 290 U. S. 389, 394(1933); 
Fletcher v. United States, 313 F. 2d 137, 138-140 
(9th Cir. 1963), cer t, denied, 374 U. S. 
812 (1963); 
Smith V. United States , 305 F. 2d 197, 205 

(9th Cir. 1962), cert , denied , Corey v . 
United States, 371 U.S. 890 (1962); 
Henry v. United States , 186 F. 2d 521 
(9th Cir. 1951). 
See also: 

Honce v. United States , 299F.2d389, 398-401 
(8th Cir. 1962). 



10. 



B. THE TRIAL COURT JUDGE MAY PROPERLY 

ASK QUESTIONS OF WITNESSES. 



Powell testified on cross-examination that he got the 
telephone number of a source of supply for marihuana from 
Dukes, that he memorized the number, and called the number 
for Dukes on April 11, 1966. At the time of trial, he indicated 
he could remember four digits of the number, and the trial 
court judge asked him to give the first two digits of the number 
[R. T. 173]. No objection to the question was made by Powell's 
counsel. Powell contends that the judge's question constitutes 
prejudicial error. 

This Court has explicitly upheld the right of a trial 
court judge to interrogate witnesses. 

"It is within the province of a federal 
trial judge to interrogate witnesses and also 
to comment on their testimony if he so desires. " 
Fletcher v. United States, supra , at 139. 
As stated in Smith v. United States , supra , at 205: 

"A federal trial judge, ... is more 
than a moderator or umpire. He has the 
responsibility to preside in such a way as to 
promote a fair and expeditious development 
of the facts unencumbered by irrelevancies. 
He may assist the jury by commenting upon the 
evidence and this may include an appraisal of 

11. 



the credibility of witnesses providing the comment 
is fair and the jury is clearly instructed that they 
are to find the facts and may disregard such 
comments, " 

As previously noted, Powell did not make an objection to 
either the trial court judge's interrogation or comments to the 
jury. The United States Supreme Court and this Court have 
repeatedly held that they will not consider claims of error in the 
trial raised for the first time on appeal, unless there is a 
showing of manifest injustice. 

Johnson v. United States , 318 U.S. 189, 200(1943); 
Eason v. Dickson, 390 F. 2d 585, 589 

(9th Cir. 1968); 
Collozo V. United States , 370 F. 2d 316, 317 

(9th Cir. 1966); 
Gilbert v. United States , 307 F. 2d 322, 325 

(9th Cir. 1962); 
Hebets v. Scott, 152 F. 2d 739 (9th Cir. 1945). 
See also: 

Whaley v. United States , 394 F. 2d 399, 400 
(10th Cir. 1968). 
Powell has made no showing of manifest injustice by the trial 
court judge's actions. 



12. 



C. ALLOWING MARIHUANA ADMITTED INTO 

EVIDENCE TO GO TO JURY ROOM DOES 
NOT CONSTITUTE PREJUDICIAL ERROR 



After the trial court judge finished instructing the jury, 
he asked counsel for both parties whether there was any objection 
to sending the exhibits to the jury room for use in the jury's 
deliberation. (The marihuana packages were the only exhibits 
in the case that were admitted into evidence [R. T. 21] ). There 
was no objection by either side [R. T. 223-224], Therefore, 
this issue is not properly raised on appeal (See supporting 
argument in Paragraph B, hereinabove). 

Even assuming for purposes of argument, that a proper 
objection had been made by Powell, the marihuana was properly 
allowed to go to the jury room. This Court has held that the 
sending of exhibits to the jury room is a matter entirely within 
the discretion of the trial court judge. 

Shayne V. United States , 255 F. 2d 739 (9th Cir. 
1958), cert, denied , 358 U. S. 823 (1958). 
See also: 

Wall V. United States , 384 F. 2d 758 (10th Cir. 1967), 
Furthermore, the jurors are instructed that they must weigh and 
consider all the evidence in arriving at their verdict [R. T. 207], 
Since the marihuana in question was part of the evidence, it was 
proper that it be considered by the jury in its deliberations. 

The Karn and Kaplan cases, cited by Powell, are not in 
point. Karn concerns exhibits that were introduced on a count of 

13. 



1 



the indictment that was dismissed before the conclusion of the 
trial, but which exhibits were sent to the jury room during 
deliberations on a second count of the indictment. Therefore, the 
jury was considering exhibits that were not even admitted into 
evidence. The Kaplan case does not even concern the issue of 
evidence going to the jury. 



D. THE TRIAL COURT DID NOT ABUSE ITS 

DISCRETION IN DENYING POWELL'S 
MOTION FOR A CONTINUANCE OF THE TRIAL. 



On May 31, 1966, Powell appeared in court for arraign- 
ment and plea to the indictment. The court appointed attorney 
Louis Licht as counsel for Powell. Powell entered a plea of not 
guilty to all counts, and trial was set for June 20, 1966, at 
9:30 A. M. [C. T. 9]. 

On June 20, 1966, Powell appeared for trial with attorney 
Sam Bubrick, who had been retained by him. The trial was 
continued to the following day at 9:30 A. M. [C. T. 10]. On June 
21, 1966, Powell made a motion for a continuance before United 
States District Judge Francis C. Whelan, which motion was 
denied. United States District Judge William N. Goodwin was 
assigned the trial of the case. Powell renewed his motion before 
Judge Goodwin on the same day and the motion was again denied. 
In support of said motion, Mr. Bubrick alleged that he had just 
come into the case and was informed by Powell that witnesses 
Powell wished to call in his defense were in Mexico City. No 

14. 



showing was made to the court as to the names of the witnesses, 
their anticipated testimony, or whether they were subject to the 
subpoena power of the court. Nor was there a showing as to what 
prejudice would result to Powell if the continuance was not 
granted [See Supplemental Transcript of Record filed with this 
Court on January 15, 1969]. 

In view of Powell's testimony at trial that he sold the 
marihuana in question, but only as a "front" for Dukes, it is 
clear that no prejudice to Powell resulted from the denial of the 
continuance. 

In Evalt V. United States , 382 F. 2d 424 (9th Cir. 1967), 
at page 427, this Court said: 

"The granting of a continuance to procure 
an absent witness rests in the sound discretion 
of the trial court and will not be reviewed on 
appeal in the absence of a clear showing of abuse. " 
See also: 

Morgan v. United States, 380 F. 2d 686 

(9th Cir. 1967); 
Miller v. United States , 351 F. 2d 598 (9th Cir. 

1965), cert, denied, 382 U.S. 1027 (1965); 
Lemons v. United States , 337 F. 2d 619 
(9th Cir. 1964). 



15. 



E. THE USE OF INFORMANTS BY FEDERAL 

NARCOTICS AGENT TO APPREHEND 
VIOLATORS OF NARCOTICS LAW IS 
PERMISSIBLE. 



At the time Dukes introduced Agent Turnbou to Powell, 
he had a narcotics charge pending against him and had agreed to 
cooperate with the Federal Bureau of Narcotics. Powell contends 
that the Government's use of Dukes to obtain evidence against 
Powell is not permissible. As authority, he cites Williamson v. 
United States, 311 F. 2d 441 (5th Cir. 1962). Williamson did not 
hold that an informer cannot be utilized, but rather critized an 
arrangment between Government agents and an informer whereby 
the informer was paid a specified amount for obtaining evidence 
against specified persons (See p. 444). The facts of the instant 
case are clearly distinguishable. 

In the instant case, Dukes was not working for the 
Government pursuant to any fee arrangment. Dukes himself 
maintained that no promises were made to him by the Govern- 
ment in exchange for his cooperation. He stated that he agreed 
to cooperate with the Government after talking to his attorney 
and in the belief that he would get consideration in the charges 
pending against him for his cooperation [R. T. 75]. 

The United States Supreme Court and this Court have 
many times upheld the use of informers by the Government in 
the apprehension of narcotics law violators. 

Masciole v. United States , 356 U. S. 386 (1958); 

16. 



i 



Sherman v. United States, 356 U. S. 369 (1958); 
Sorrells v. United States , 287 U. S. 435,551 (1932); 
Gonzales v. United States , 251 F. 2d 298 

(9th Cir. 1958); 
Trice v. United States , 211 F. 2d 513, 516 (9th 

Cir. 1954), cert, denied, 348 U. S. 900 (1954). 
This court stated in Trice, supra, at 516: 

"So great is the menace [the use of narcotics] 
that the hiring of disreputable persons to act with 
the narcotics agents in deceit and by despicable 
methods to catch distributors of [narcotics] has 
been sanctioned by the highest courts as the only 
successful manner to combat the evil. " 

Parenthetically, it must be noted that the objection to use 
of evidence obtained with the help of an informant should have 
been raised by a motion to suppress. Since no such motion was 
made by Powell, the issue is not properly raised on appeal. 
Kuhl V. United States , 370 F. 2d 20, 21 
(9th Cir. 1966). 



F. THE INSTRUCTION TO THE JURY OF §4744(a) 

OF TITLE 26, UNITED STATES CODE, DOES 
NOT CONSTITUTE REVERSIBLE ERROR. 



Powell was not charged with violating 26 United States 
Code, §4744(a). However, for a reason that does not appear in 

17. 



k 



the record, the trial court judge read said section to the jury in 
his instructions. There was no objection to the instructions 
[R. T. 224], The law is abundantly clear that where no objection 
is made to an instruction at trial, the party failing to object 
cannot complain on appeal about the instruction given. 

Singer v. United States, 380 U. S. 24, 38 (1965); 
White V. United States , 394 F. 2d 49, 55-56 

(9th Cir. 1968); 
Cooper V. United States , 282 F. 2d 527 
(9th Cir. 1960). 
Since Powell was not charged with a violation of Title 26, 
United States Code, §4744(a), no prejudice to him resulted from 
the reading of said section to the jury. 

The trial court judge correctly instructed the jury as to 
the two essential elements needed to prove the offense of Title 26, 
United States Code, §4742(a) [R. T. 216]. The record is clear 
that Powell did not obtain any required order form from Agent 
Turnbou at the time of the two sales of marihuana [R. T. 20]. 



G. IT IS NOT NECESSARY TO CONSIDER THE 

VALIDITY OF POWELL'S CONVICTIONS ON 
COUNTS ONE, TWO, FOUR AND FIVE OF 
THE INDICTMENT. 



Where a defendant is sentenced to the same period of 
incarceration for convictions on more than one count of an 
indictment and the sentences are to run concurrently, the fact 
that defendant was validly convicted on any one count precludes 

18. 



M 



reversal regardless of the validity of the convictions on the 
other counts. 

Lawn V. United States , 355 U.S. 339, 359 (1958); 
Hirabayashi v. United States , 320 U. S. 81,85(1943); 
Blunt V. United States , 404 F. 2d 1283, 1289 

(D. C. Cir. 1968); 
Sherwin v. United States , 320 F. 2d 137, 156 

(9th Cir. 1963); 
Noah v. United States , 304 F. 2d 317, 318 

(9th Cir. 1962); 
Russell v. United States , 288 F. 2d 520, 521-522 
(9th Cir. 1961). 
The appellee is aware of the recent decision of the United 

States Supreme Court in Leary v. United States , U. S. 

(1969), as it affects the presumptions contained in Title 21, 
United States Code, §176(a). 

However, in the instant case, Powell was sentenced to 
the custody of the Attorney General for five years on each of the 
six counts of the indictment, with the sentence on all counts to 
commence and run concurrently [C. T. 33]. Since the convictions 
on counts Three and Six, which charged violations of Title 26, 
United States Code, §4742(a), are valid and not subject to attack 
on appeal, consideration of the validity of the convictions on 
Counts One, Two, Four and Five is not necessary. 



19. 



VI 

CONCLUSION 

For the foregoing reasons, appellant's conviction should 

be affirmed. 

Respectfully submitted, 

WM. MATTHEW BYRNE, JR. 
United States Attorney 

ROBERT L. BROSIO 

Assistant U. S. Attorney 
Chief, Criminal Division 

JAMES E. SHEKOYAN 

Assistant U. S. Attorney 

Attorneys for Appellee 
United States of America 



20. 



NO. 2 2 6 5 7^' 
IN THE UNITED STATES COURT OF APPEALS 
FOR THE NINTH CIRCUIT 



DON WADE, 



Appellant, 



vs. 



UNITED STATES OF AMERICA, 

Appellee. 



FILED 

JUN201969 

APPELLEE'S BRIE^M. B. LUCK, CLERK 



APPEAL FROM 
THE UNITED STATES DISTRICT COURT 
FOR THE CENTRAL DISTRICT OF CALIFORNIA 



WM. MATTHEW BYRNE, JR. 
United States Attorney 

ROBERT L. BROSIO 

Assistant U. S. Attorney 
Chief, Criminal Division 

ALAN H. FRIEDMAN 

Assistant U. S. Attorney 

1200 U. S. Court House 
312 North Spring Street 
Los Angeles, California 90012 
Tel: 688-2434 

Attorneys for Appellee 
United States of America 



NO. 2 2 6 5 7 
IN THE UNITED STATES COURT OF APPEALS 
FOR THE NINTH CIRCUIT 

DON WADE, 

Appellant, 
vs. 
UNITED STATES OF AMERICA, 

Appellee. 



APPELLEE'S BRIEF 



APPEAL FROM 
THE UNITED STATES DISTRICT COURT 
FOR THE CENTRAL DISTRICT OF CALIFORNIA 



WM. MATTHEW BYRNE, JR. 
United States Attorney 

ROBERT L. BROSIO 

Assistant U. S. Attorney- 
Chief, Criminal Division 

ALAN H. FRIEDMAN 

Assistant U. S. Attorney 

1200 U. S. Court House 
312 North Spring Street 
Los Angeles, California 90012 
Tel: 688-2434 

Attorneys for Appellee 
United States of America 



TOPICAL INDEX 



Table of Authorities 



Page 
ill 



I STATEMENT OF PLEADINGS AND 

FACTS DISCLOSING JURISDICTION 1 

II STATUTES AND RULES INVOLVED 3 

III QUESTIONS PRESENTED 6 

IV STATEMENT OF FACTS 6 

V ARGUMENT 12 

A. THE TRIAL COURT DID NOT 

VIOLATE DEFENDANT'S CON- 
STITUTIONAL PRIVILEGE AGAINST 
SELF-INCRIMINATION BY 
CONDITIONING DEFENDANT'S 
RAISING THE DEFENSE OF 
INSANITY UPON HIS FIRST SUB- 
MITTING TO A MENTAL 
EXAMINATION BY A COURT- 
APPOINTED PSYCHIATRIST AND 
HIS AFFORDING SAID PSYCHIATRIST 
SUCH COOPERATION AND INFORMA- 
TION AS MAY BE REQUIRED IN 
PROPERLY CONDUCTING THE MENTAL 
EXAMINATION. 12 

1. The Constitutional Privilege 
Against Self-incrimination Does 
Not Extend to Protect An Accused 
From Being Examined By A 
Court-Appointed Psychiatrist As 
To Whether Or Not The Accused 
Was Legally Insane At the Time 

Of The Commission Of The Offense 

Charged If There Is Reasonable 

Cause To Believe That Such An 

Issue Will Be Raised At Trial. 12 

2. The Trial Court Acted Reasonably 
in Conditioning Defendant's 
Assertion Of An Insanity Defense 
At Trial Upon His Cooperating 

With Court-Appointed Psychiatrists. 22 



\ 



Page 

B. THE TRIAL COURT DID NOT ERR BY 

INSTRUCTING THE JURY ON THE 
DEFENSE OF INSANITY IN THE TERMS 
OF THE TEST PRESENTLY APPROVED 
BY THE UNITED STATES COURT OF 
APPEALS FOR THE NINTH CIRCUIT, 
NAMELY THAT INSTRUCTION CON- 
TAINED IN MATHES AND DEVITT, 
FEDERAL JURY PRACTICE AND 
INSTRUCTIONS, §10.14. 24 

1. The Underlying Rationale Expressed 
In Sauer v. United States , 341 F. 2d 
640 (9th Cir. 1957), cert, denied 
354 U.S. 940 (1957) Remains Viable 
Today. 24 

2. The Holding Of Sauer v. United 
States, supra , Has Been Con- 
sistently Reaffirmed In This 
Circuit, And There Is Nothing 
In The Record Of This Case 
Which Justifies A Departure 

From Those Rulings. 32 

CONCLUSION 35 



11. 



TABLE OF AUTHORITIES 

Cases Page 

Alexander v. United States, 

380 F. 2d 33 (8th Cir. 1967) 13, 15 

Ashton V. United States, 

324 F.2d 399 (D.C.Cir. 1963) 21 

Church V. United States, 

390 F. 2d 564 (9th Cir. 1968) 34 

Davis V. United States, 

165 U. S. 373 (1897) 25 

Durham v. United States, 

214 F. 2d 862 (D.C.Cir. 1954) 25 

Featherson v. Clark, 

293F.Supp. 508 (W.D.Texas 1968) 23 

Johnson v. United States, 

406 F. 2d nil (9th Cir. 1969) 34 

Lebron v. United States, 

299 F. 2d 16 (D.C. Cir. 1956), 

cert, denied 351 U.S. 974(1956) 19 

Lynch v. Overholser, 

369 U.S. 705 (1962) 30 

Maxwell v. United States, 

368 F. 2d 735 (9th Cir. 1966) 34 

Mitchell V. United States, 

316 F. 2d 354 (D.C. Cir. 1963) 14 

Oliver v. United States, 

396 F. 2d 434 (9th Cir. 1968) 34 

Pope V. United States, 

372 F. 2d 710 (8th Cir. 1967), vacated on 

other grounds 392 U.S. 651 (1968) 13, 16 

Ramer v. United States, 

C.A. 21,985 (9th Cir. May 15, 1969) 33, 34 

Sauer v. United States, 

341 F. 2d 640 (9th Cir. 1957), 

cert, denied 354 U. S. 940(1957) 24-26, 32-35 

iii. 



Smith V. United States, 

342 F. 2d 725 (9th Cir. 1965) 

State V. Meyers, 

220 S.C. 309, 67 S. E. 2d (1951) 

State V. Obstein, 

52 N. J. 516, 247 A. 2d 5 (1968) 

State V. Whitlow, 

45 N. J. 3, 210 A. 2d 763 (1965) 

United States v. Albright, 

388 F. 2d 719 (4th Cir. 1968) 

Winn V. United States, 

270 F. 2d 326 (D.C.Cir. 1959) 

Wion V. United States, 

325 F. 2d 420 (10th Cir. 1963), 
cert, denied 377 U. S. 946(1964) 



Statutes 



D. C. Code Ann. , §24-301 
D,C. Code Ann. , §24-301(d) 



18 U.S.C. 
18 U.S.C. 
18 U.S.C. 
18 U.S.C. 
28 U.S.C. 
28 U.S.C. 



§2113(a) 

§2113(d) 

§3231 

§4244 

§1291 

§1294 



Texts 





Page 




32-34 




18 




22 


17, 


18, 23 




13, 20 



13 

32 

14 

27 

1-3 

1-3 

2 

3, 12, 20, 21 

2 



Karsh, The Durham Rule and Judicial Administration 
of the Insanity Defense in the District of 
Columbia, 70 Yale Law Journal 905 16 

Mathes and Devitt, Federal Jury Practice and 

Instructions, §10. 14 6, 24 



IV. 



Rules Page 

Federal Rules of Criminal Procedure: 

Rule 28 5, 13 

Miscellaneous 

American Law Institute, Model Penal Code 
(Proposed Official Draft 1962): 

§4.01 24, 32, 33 

§4.08 31 



NO. 2 2 6 5 7 
IN THE UNITED STATES COURT OF APPEALS 
FOR THE NINTH CIRCUIT 

DON WADE, 

Appellant, 
vs. 
UNITED STATES OF AMERICA, 

Appellee. 



APPELLEE'S BRIEF 



I 

STATEMENT OF PLEADINGS AND FACTS 

DISCLOSING JURISDICTION 

On Decennber 21, 1966, the Federal Grand Jury for the 
Central District of California returned a one-count indictment 
charging Don Wade (hereinafter referred to as "defendant") with 

violating Title 18, United States Code, §2113 (a) and §2113 (d) 

1/ 
[T. R.^ p. 2]. — The indictment charged as follows: 

On or about November 23, 1966, in Los Angeles 

County, within the Central District of California, 



^1 "T. R. " refers to Transmitted Record herein. 

1. 



defendant Don Wade, by force and violence and by 
intimidation, knowingly and willfully took from 
Susan P. Blom and Lela Kinsey, $2, 841. 20, belong- 
ing to, and in the care, custody, control, management 
and possession of Century Bank, 2028 Westwood Blvd. , 
West Los Angeles, a member bank of the Federal 
Reserve System and a bank whose accounts were 
insured by the Federal Deposit Insurance Corporation. 

In committing the offense heretofore charged, 
defendant Don Wade assaulted and put in jeopardy 
the lives of Susan P. Blom and Lela Kinsey by the 
use of a revolver, a dangerous weapon and device. 

On October 13, 1967, after a trial by jury, the defendant 
was found and adjudged guilty as charged of violating Title 18, 
United States Code, §§2113 (a) and 2113 (d) [T. R.,pp. 46, 47]. 
On October 20, 1967, the defendant filed a timely Notice of 
Appeal [T. R., p. 48]. 

Jurisdiction of the District Court was based on Title 18, 
United States Code, §3231 and Title 18, United States §§2113 (a) 
and 2113 (d). Jurisdiction of the United States Circuit Court of 
Appeals for the Ninth Circuit is based on Title 28, United States 
Code, §§1291 and 1294. 



II 

STATUTES AND RULES INVOLVED 

Title 18, United States Code, §§2113 (a) and 2113 (d) 
provide, in pertinent part, as follows: 

" (a) Whoever, by force and violence, or by 
intimidation, takes . , . from the person or 
presence of another any . . . money , . . belong- 
ing to, or in the care, custody, control, management, 
or possession of, any bank . . . [s]hallbe fined 
not more than $5, 000 or imprisoned not more than 
twenty years, or both . . . 

(d) Whoever, in committing . . . any offense 
defined in subsection[s] (a) of this section, assaults 
any person, or puts in jeopardy the life of any person 
by the use of any dangerous weapon or device, shall 
be fined not more than $10, 000 or imprisoned not 
more than twenty-five years, or both. " 

Title 18, United States Code, §4244 provides as follows: 

"Whenever after arrest and prior to the 
imposition of sentence or prior to the expiration 
of any period of probation the United States Attorney 
has reasonable cause to believe that a person 
charged with an offense against the United States 
may be presently insane or otherwise so mentally 

3. 



incompetent as to be unable to understand the pro- 
ceedings against him or properly to assist in his 
own defense, he shall file a motion for a judicial 
determination of such mental competency of the 
accused, setting forth the ground for such belief 
with the trial court in which proceedings are pend- 
ing. Upon such a motion or upon a similar motion 
in behalf of the accused, or upon its own motion, 
the court shall cause the accused, whether or not 
previously admitted to bail, to be examined as to 
his mental condition by at least one qualified psychi- 
atrist, who shall report to the court. For the purpose 
of the examination the court may order the accused 
committed for such reasonable period as the court 
may determine to a suitable hospital or other facility 
to be designated by the court. K the report of the 
psychiatrist indicates a state of present insanity or 
such mental incompetency in the accused, the court 
shall hold a hearing, upon due notice, at which 
evidence as to the mental condition of the accused may 
be submitted, including that of the reporting psychi- 
atrist, and make a finding with respect thereto. No 
statement made by the accused in the course of any 
examination into his sanity or mental competency 
provided for by this section, whether the examination 
shall be with or without the consent of the accused 

4. 



shall be admitted in evidence against the accused on 
the issue of guilt in any criminal proceeding. A 
finding by the judge that the accused is mentally 
competent to stand trial shall in no way prejudice 
the accused in a plea of insanity as a defense to the 
crime charged; such finding shall not be introduced 
in evidence on that issue nor otherwise be brought 
to the notice of the jury. 

Federal Rule of Criminal Procedure 28 provides, in 
pertinent part, as follows: 

". . . The Court may appoint any expert 
witnesses of its own selection ... A witness 
so appointed shall advise the parties of his findings, 
if any, and may be thereafter called to testify by the 
court or by any party. He shall be subject to cross- 
examination by each party . . ." 



Ill 

A. DID THE TRIAL COURT ERR BY 
CONDITIONING DEFENDANT'S RAISING THE DEFENSE 
OF INSANITY UPON HIS FIRST SUBMITTING TO A 
MENTAL EXAMINATION BY A COURT -APPOINTED 
PSYCHIATRIST AND HIS AFFORDING SAID PSYCHI- 
ATRIST SUCH COOPERATION AND INFORMATION 

AS MAY BE REQUIRED IN PROPERLY CONDUCTING 
THE MENTAL EXAMINATION? 

B. DID THE TRIAL COURT ERR BY 
INSTRUCTING THE JURY ON THE DEFENSE OF 
INSANITY IN THE TERMS OF THE INSANITY TEST 
PRESENTLY APPROVED BY THE UNITED STATES 
COURT OF APPEALS FOR THE NINTH CIRCUIT, 
NAMELY, THAT INSTRUCTION CONTAINED IN 
MATHES AND DEVITT, FEDERAL JURY PRACTICE 
AND INSTRUCTIONS, §10. 14. 

IV 
STATEMENT OF FACTS 



A. PRE-TRIAL 

1. On December 27, 1966, defendant made a motion 

for an appointment of a psychiatrist. Said motion was granted, 
but subsequently defendant moved for and was granted an order 
vacating the appointment of said psychiatrist [T. R. p., 3]. 

6. 



2. On January 5, 1967, the defendant moved for and 
was granted an order directing the U. S. Marshal to deliver the 
defendant to his private psychiatrist. Contemporaneous with said 
order, the trial court granted the Government's motion for the 
appointment of a psychiatrist for the purpose of reporting to the 
court whether: (1) the defendant was sane; (2) the defendant was 
then able to understand the proceedings against him; (3) the 
defendant was able to assist in his own defense; (4) the defendant's 
probable prognosis with respect to the above questions; and (5) 
whether the defendant was legally insane at the time of the commis- 
sion of the offense [T. R.,pp. 4-6]. 

3. On the advice of his counsel, defendant refused to 
cooperate with the court-appointed psychiatrist with respect to an 
examination as to whether or not he was legally insane at the 
time of the offense [T. R., pp. 13, 18-19]. 

4. The trial court, on January 23, 1967, found the 
defendant sane and able to understand the proceedings against 
him [T. R. p. 8]. 

5. On January 30, 1967, defendant moved the trial 
court for an order vacating that portion of the Order Appointing 
Psychiatrist of January 5, 1967, which pertained to an examination 
of whether defendant was legally insane at the time of the offense 
and requiring him to cooperate and afford such information as 
may be required in properly conducting such a mental examination 
[T. R.,p. 17]. 

6. On February 28, 1967, the trial court denied 

7. 



defendant's motion [Memorandum Opinion, T. R. pp. 13-16]. 

7. On March 2, 1967, the trial court ordered that 
defendant would be precluded from offering any evidence on the 
defense of insanity unless he "afford such cooperation and infor- 
mation to the court-appointed psychiatrist as may be required in 
properly conducting such examination ..." [T. R.,p. 22], 

8. On June 8, 1967, the trial court ordered the 
appointment of two additional psychiatrists, Drs. Karl Von Hagen 
and Seymour Pollack, to examine the defendant and report to the 
trial court with respect to, among other things, the question of 
whether defendant was legally insane at the time of the offense 
[T. R., pp. 26-29]. 

9. On August 16, 1967, the trial court ordered the 
appointment of psychologist Leonard B. Olinger as an examining 
psychologist in the case [T. R., p. 33]. 

B. TRIAL 

1. At approximately 10:45 A. M. , on November 23, 
1969, the defendant appeared in the Century Bank, and shouted, 

"This is a stickup. Everybody get to the back of the bank. " 

2/ 
[R. T., pp. 70, 72, 81, 86]. - 

2. Defendant pointed a gun at teller Susan Blom and 
kept saying, "Don't look at me. Don't look at me. . . . Fill. " 
[R. T.,p. 71]. 



2_l "R. T. " refers to Reporter's Transcript herein. 

8. 



3. It was stipulated that the Century Bank was a 
member of the Federal Reserve System, and a bank the deposits 
of which were insured by the Federal Deposit Insurance Corpora- 
tion [R. T., p. 79]. Loss to the bank was stipulated to be 

$2, 841. 20 [R. T.,p. 79]. 

4. At the time of the robbery the defendant wore a 
bandage or tape on his right cheek [R. T., p. 91]; wore a dark 
hat, dark suit, a tie and sunglasses [R. T., p. 94]; and made his 
getaway in a red Austin-Healey convertible [R. T. , p. 95], which 
was stolen on November 23, 1966 [R. T.,pp. 97-98]. 

5. Defendant confessed to committing the bank robbery 
[R. T.,pp. 102-103], after being arrested immediately after the 
robbery [R. T., pp. 108-115] and subsequently admitted using the 
tape to hide a blemish [R. T., p. 132]. 

6. Defendant testified that on the day prior to the bank 
robbery that he approached the bank with a revolver in his belt, 
had the impulse to rob the bank, but was able to control it 

[R. T., pp. 285-286]. 

7. Defendant further testified that on the day of the 
robbery he stole a red Austin-Healey [R. T. , pp. 288-291], but 
could remember only a few details after stealing the vehicle 
[R. T.,pp. 291-308]. 

8. Dr. Hacker, called as a witness for the defense, 
testified that, at the time of the offense, the defendant was 
suffering from an emotional disorder; that the defendant probably 
had periods in which he was not totally aware of what he was 

9. 



doing; and that there were periods in which the defendant could 
not conform his conduct to the thoughts he possessed [R. T.,p. 319]. 

9. Dr. Cohn, also called as a defense witness, testi- 

fied that on the date of the offense, the defendant was not able to 
distinguish between right and wrong and that he was not able to 
understand the nature of his act [R. T., p. 357]; that the defendant 
was suffering from a psychotic depression [R. T.,p. 358]; and 
that he lacked the substantial capacity to conform his conduct to 
the requirements of the law [R. T., p. 359, 369]. 

10. Defendant made a motion to exclude the testimony 
of any court -appointed psychiatrist based on the privilege of self- 
incrimination and said motion was denied by the trial court 

[R. T., p. 414]. 

11. Dr. dinger, a psychologist called as a witness 
for the Government, testified that on the date of the offense the 
defendant knew the difference between right and wrong; that he 
knew the nature and quality of his acts [R. T.,p. 421]; and that 
his testing showed no evidence of psychosis or brain damage 
[R. T.,p. 422]. 

12. Dr. Pollack, called as a Government witness, 
testified that the defendant was sane at the time of the commission 
of the offense [R. T., p. 475]; that he was capable of differentiating 
between right and wrong; that he was aware of the nature and 
quality of his acts [R. T., p. 476]; that he was capable of exer- 
cising his will, power or volition; that he did not have a mental 
disease or defect [R. T., p. 477]; and that he was capable of 

10. 



conforming his conduct to the law [R. T.,p. 478]. 

13. Dr. Von Hagen, also called to testify by the Govern- 
ment, testified that on the date of the commission of the offense, 
that the defendant was sane; that his actions were not beyond his 
control; that he did not have any mental disease [R. T.,p, 527]; 
and that he was able to conform his conduct to the requirements 

of the law [R. T., p. 528]. 

14. Mr. Barron, a Lieutenant employed by the Los 
Angeles Police Department, testified as to the oral confession 
made by the defendant on the day of the robbery [R. T.,pp. 558-9]. 



11. 



V 

ARGUMENT 



A. THE TRIAL COURT DID NOT VIOLATE 

DEFENDANT'S CONSTITUTIONAL PRIVILEGE 
AGAINST SELF-INCRIMINATION BY CONDITION- 
ING DEFENDANT'S RAISING THE DEFENSE OF 
INSANITY UPON HIS FIRST SUBMITTING TO A 
MENTAL EXAMINATION BY A COURT - 
APPOINTED PSYCHIATRIST AND HIS AFFORD- 
ING SAID PSYCHIATRIST SUCH COOPERATION 
AND INFORMATION AS MAY BE REQUIRED 
IN PROPERLY CONDUCTING THE MENTAL 
EXAMINATION. 



The Constitutional Privilege Against Self- 
incrimination Does Not Extend To Protect 
An Accused From Being Examined By A 
Court-Appointed Psychiatrist As To 
Whether Or Not The Accused Was Legally 
Insane At The Time Of The Commission Of 
The Offense Charged If There Is Reasonable 
Cause To Believe That Such An Issue Will 
Be Raised At Trial. 



(a) The trial court properly exercised its "inherent 
power" to order defendant's examination by a court -appointed 
psychiatrist as to the question of whether or not the defendant was 
legally insane at the time of the commission of the offense charged. 

Title 18, United States Code, §4244, supra , explicitly 
provides for the duties and conditions under which a motion for a 
psychiatric ei^amination may be made. Although §4244 does not 
contain an express provision for a court-appointed psychiatrist 
to examine an accused as to his mental condition at the time of 
the commission of the offense, it cannot reasonably be concluded, 



12. 



therefore, that no such power exists in the trial court, £.' On the 
contrary, it has been held that a federal district court has the 
inherent power to require a psychiatric examination of an accused 
as to the issue of insanity at the time of the offense where such 
issue is raised at trial by the defendant. United States v. Albr ight, 
388 F. 2d 719 (4th Cir. 1968); see also Alexander v. United 
States , 380 F. 2d 33 (8th Cir. 1967); Pope v. United States , 372 
F. 2d 710 (8th Cir. 1967), vacated on other grounds , 392 U.S. 

651 (1968); Winn v. United States , 270 F. 2d 326 (D. C. Cir. 1959). 
Although in United States v. Albright , supra , the issue of defen- 
dant's mental condition at the tirr.e offense was not clearly raised 
until the day trial began, the court in Albright relied upon Winn v. 
United States , supra , to support its holding. The appellate court 
in Winn was concerned with the trial court's denial of the govern- 
ment's pre-trial motion for a . . . "complete and thorough 
mental examination ..." Winn v. United States , supra , at 327, 
The trial court in Winn granted an order limiting the examination 
solely to the issue of the defendant's mental competency to stand 
trial. The appellate court, in reversing the conviction, stated at 
327 and 328 as follows: 



3^/ See Federal Rule of Criminal Procedure 28 which provides, 

in pertinent part, as follows: 
". . . The court may appoint any expert witnesses . . . 
of its own selection ... A witness so appointed shall advise 
the parties of his findings, if any, and may thereafter be called 
to testify by the court or by any party. He shall be subject to 
cross -examination by each party . . ." 



13. 



"... the prosecutor who knows that the 
accused's mental state at the time of the crime will 
be the critical issue at the trial . . . has an obliga- 
tion to see to it that any pre-trial mental examination 
of the accused that may be ordered be broad enough to 
cast light on that issue . . . 

"It is true that D. C. Code §24-301 (Supp. VII, 
1959) provides only for an examination limited to trial 
competency. But nothing in that statute or anywhere 
else in the law prevents the court, in a case where it 
is obvious that the trial will revolve about the issue 
of the accused's mental state at the time of the crime, 

from ordering such examinations as will produce the 

4/ 
evidence required to determine that issue . . . " — 

It is asserted at page 16 of Appellant's Opening Brief that: 

"... the prosecution is not empty handed. 
It may present evidence of the defendant's behavior 
before, during and after the alleged crime; it may 
question the expert witness for the offense as to the 
basis of any opinion he presents and ask an expert for 
the prosecution to present his own opinion based on 



4/ See also Mitchell v. United States, 316 F. 2d 354, 360 

(D. C.Cir. 1963), wherein the Court interpreted D. C. 
CODE ANN. §24-301 to include the purpose of obtaining 
evidence on whether the jury should be instructed on the issue 
of insanity. 



14. 



those facts and others that may have been intro- 
duced in evidence, as well as his observation of 
the defendant in the courtroom and during any 
examination made to determine the defendant's 
ability to stand trial ..." 

This argument was best met and refuted in Alexander v. 



United States , supra , wherein that Court stated as follows at 

page 39: 

"It would violate judicial common sense to 
permit a defendant to invoke the defense of insanity 
and foreclose the Government from the benefit of a 
mental examination to meet this issue . . . 

. . . To place the burden of proof on this 
issue on the Government and at the same time to 
deprive the Government of an opportunity for a 
mental examination of the defendant would lead to 
an absurdity and would be a travesty on justice " 
[citation omitted]. 

It is submitted that the ever -important search for the truth, 
bearing in mind the protection of both individual and society, is 
not a quest to be borne by the accused alone. The Government, 
in order to best perform its duty of protecting its citizens, must 
be allowed to share in that search for the truth, as long as the 
methods employed in such search remain within the dictates of 

15. 



the United States Constitution. 

It should be noted in this connection that valid distinctions 
exist between a court-appointed psychiatric examination and any 

other context in which an accused is compelled to cooperate by 

5/ 
divulging information. — Said distinction arising from the nature 

of the trial in which insanity is raised as a defense, are that (1) 

such a defense is raised by an accused; (2) if the defense is raised, 

however, the Government must bear the ultimate burden of proof 

beyond a reasonable doubt; and (3) that the information essential 

in carrying that burden of proof can only be obtained, in most 

6 / 
cases, from the accused himself. — With these distinctions in 

mind, the court in Pope v. United States , supra, clearly rejected 
a constitutional attack on a court-ordered psychiatric examination 
and stated at page 720 as follows: 

"Certainly, the criminal trial is still a 
search for truth subject, of course, to constitu- 
tional guaranties. It would be a strange situation 
indeed, if first, the government is to be compelled 
to afford the defense ample psychiatric service and 
evidence at government expense and, second, if the 
government is to have the burden of proof, as it 
does with the competency issue in the case, Davis 



_5/ Karsh, " The Durham Rule and Judicial Administration 

of the Insanity Defense in the District of Columbia" 
70 Yale Law Journal 905, 919-920. 

6_/ Id at 919, n. 73. 

16. 



i 



V. United States, 160 U. S. 469, 486, 488, 
16S.Ct. 353, 40 L. Ed. 499(1895), and yet 
it is to be denied the opportunity to have its 
own corresponding and verifying examination, 
a step which perhaps is the most trustworthy 
means of attempting to meet that burden. Yet 
that is precisely what the defense claims is 
appropriate here. " 

In State v. Whitlow, 45 N. J. 3, 210 A. 2d 763 (1965), the 
New Jersey Supreme Court approved the appointment of state 
psychiatrists to examine an accused, over his objection, as to 
his sanity at the time of the commission of the offense. In 
rejecting an argument based on the privilege of self-incrimination, 
the Whitlow court expressed its reasoning at page 769 as follows: 
"it would be most anomalous to say that 
a defendant may advance the defense of insanity, 
have himself examined by his own experts and 
then invoke the constitutional guarantees against 
self-incrimination for the purpose of preventing 
examination by the State . . . [citation omitted]. 
It would be a strange doctrine, indeed, to permit 
a person charged with crime to put in issue his 
want of mental capacity to commit it, and in 
order to make his plea invulnerable, prevent 
all inquiry into his mental state or condition 

17. 



. . . [citation omitted]. To allow the accused 
to obtain his own expert, and after a private 
and unlimited conference with him, to plead 
insanity, and then put forward the privilege 
against self-incrimination to frustrate like 
activities by the prosecution is to balance 

the competing interests unfairly and dispro- 

7/ 
portionately against the public . . . " — 

b. Reasonable cause existed for the ordering of the 

psychiatric examination to determine (1) defendant's mental 
competency to stand trial and (2) whether or not he was legally 
insane at the time of the offense. 

On December 27, 1966, defendant's counsel sought and 
obtained an order appointing psychiatrist to examine the defendant. 
Prior to such an order being signed by the Honorable Jesse W. 
Custis, Federal District Court Judge, defendant's counsel moved 
for an order vacating said appointment. This latter motion was 
also granted [T.R-,p. 3]. These motions were made within thirty- 
five days from the date of the commission of the robbery in 
question [R. T., pp. 69-70]. 

On January 5, 1967, defendant's counsel moved for and 
was granted an order directing the United States Marshal to 



7/ See also State v. Meyers , 220 S. C. 309, 67 S. E. 2d (1951), 

relied on by Whitlow, supra, wherein the Meyers court 
also rejected a self-incrimination and due process attack on a 
compulsory psychiatric examination. 

18. 



produce the defendant at the office of Frederick J. Hacker, M. D. 
for the purpose of conducting a psychiatric examination [T. R. , 
p. 4-6]. It was on this latter date, and contemporaneous with the 
defendant's motion, that the Government first made its motion 
for the appointment of a psychiatrist [T. R. , pp. 4-6], after having 
been apprised by defendant that he was going to raise the issue of 
insanity as a defense [see T. R. , p. 13]. In addition, since all of 
defendant's motions were made within a relatively short period 
after the commission of the offense charged, further reasonable 
cause existed to support a belief that he was mentally incompetent 
to stand trial. Such reasonable cause may be inferred in that the 
defendant on December 27, 1966, made the motion for an order 
appointing a psychiatrist and such motion, in order to have been 
granted, must have been made in good faith or on grounds not 
deemed frivolous. See Lebron v. United States, 299 F. 2d 16 
(D.C.Cir. 1956), cert, denied , 351 U. S. 974(1956). Having such 
reasonable cause to question the defendant's mental competency 
to stand trial, along with the fact such reasonable cause was 
evident shortly over a month's period of time from the date of 
the offense, reasonable cause existed to believe that the defendant 

may have been legally insane at the time of the offense, or, at 

8/ 
least, that the defendant would tender such a defense at trial. — 

Such reasonable cause would have been evident even had defense 

counsel not informed the Government that the defendant was going 



8^/ It is noteworthy that the sole defense raised at trial was, 

in fact, that of defendant's insanity at the time of the 
commission of the crime. 

19. 



q/ 
to raise the defense of insanity at trial [See T. R. pp. 13 and 18]. — 

The Government asserts, based on the foregoing, that once 

the trial court was under a duty to order a mental examination 

pursuant to §4244, no error was committed by including in such 

an order, pursuant to its "inherent power", a requirement that 

defendant also submit to examination concerning his mental 

competency at the time of the commission of the offense. Upon 

the giving of adequate notice of the scope of the inquiry as detailed 

by the "Order Appointing Psychiatrist" filed January 10, 1967 

[T.R., pp. 5-6], due process was afforded to the defendant. See 

United States v. Driscoll , supra at 137-8, reh. denied , supra at 

141. H/ 

c. Defendant's privilege against self-incrimination 

was not violated because no "statements" of the defendant made 
to a court -appointed psychiatrist were introduced at trial. 

Title 18, United States Code, §4244 provides, in part, as 
follows: 



£/ See United States v. Albright, supra at 722 in which a 

period of approximately eleven months had elapsed between 
date of the offense and the granting of the order for psychiatric 
examination. 

10 / The entire discussion above is based on the assumption that 

the order requiring an accused to submit to an examination 
as to his sanity at the time of the commission of the offense, such 
order being made under the trial court's "inherent power" but 
included in an order made pursuant to Title 18, United States Code, 
§4244, is encumbered with the same restriction of "reasonable 
cause". 



20. 



"... No statement made by the accused in 
the course of any examination into his sanity 
or mental competency provided for by this 
section, whether the examination be with or 
without the consent of the accused , shall be 
admitted in evidence against the accused on 
the issue of guilt in any criminal proceeding 
. . . . " [Emphasis added. ] 

From a reading of this portion of §4244 it clearly appears 
that Congress was appreciative of the possibility of an accused 
refusing to consent to being examined by a court -appointed 
psychiatrist prior to trial. As so limited, however, §4244 would 
bar, at trial, all statements made by the accused during such an 
examination from being introduced on the issue of an accused's 
guilt. A review of the trial record herein will reflect that the 
only person that elicited any statement made by the defendant to 
a court -appointed psychiatrist was counsel for the defendant [See, 
e.g. R.T. , pp. 511-512]. 

The evidentiary restriction clearly enunciated in §4244 
adequately protects an accused's privilege against self-incrimina- 
tion, especially, in cases like the one at hand, where the issue of 
guilt or innocence in a factual sense is no longer extant at the 
time the court-appointed psychiatrists testify. — 



n/ See Ashton v. United States , 324 F. 2d 399 (D. C. Cir. 1963) 
which indicates a relaxation of §4244 restrictions where 

(Continued) 

21. 



The Trial Court Acted Reasonably in 
Conditioning Defendant's Assertion of 
an Insanity Defense at Trial Upon His 
Cooperating with Court -Appointed 
Psychiatrists. 



The trial court properly concluded, based on the foregoing 
discussion, that defendant could not refuse to cooperate with the 
court -appointed psychiatrists by invoking his privilege against 
self-incrimination [Memorandum Opinion, T. R. , pp. 13-16]. 
The defendant, on advice of counsel refused to cooperate with 
any psychiatrists other than those of his own choosing [T. R. , 
pp. 18-19]. He was then ordered to cooperate with court- 
appointed counsel or be precluded from offering any evidence 
upon the defense of insanity [T. R. , p. 22]. 

As demonstrated in the discussion above, the defendant 
had the duty to comply and not the right to refuse to comply 
with the trial court's order to submit to an examination by court- 
appointed psychiatrists. The order conditioning the raising of 
an insanity defense on cooperating with the court -appointed 
psychiatrists was obviously designed to effectively compel 
compliance with the trial court's order appointing said psychia- 
trists. In the recent case of State v. Obstein, 52 N.J. 516, 
247 A. 2d 5 (1968), the New Jersey Supreme Court stated at 
page 12, in dictum, as follows: 



11/ (Continued) 

there is no longer an issue as to whether an accused 
committed the acts which constitute the offense. 



22, 



"If a defendant stands mute at the 
examination or cooperates except for a 
refusal to discuss the alleged criminal event, 
at the trial his own psychiatrists will not be 
permitted over the State's objection to testify 
to the history of the event given to them, 
[citing State v. Whitlow , supra ]. Further 
if, as is generally the case, defendant's 
psychiatrists required the history in order 

to form an opinion as to insanity, they would 

12/ 
be precluded from testifying to that opinion. " — 

The Government submits, therefore, that the trial court 
issued its order appointing the psychiatrist on a proper and 
reasonable condition designed to promote compliance thereto 
and a just trial of the issues. A review of the record will clearly 
reflect that the trial herein denied neither party its right to a 
fair trial on the merits. Neither the Government nor the accused 
is entitled to a favorable verdict based on surprise or secrecy. 
See Feather son v. Clark, 293F.Supp. 508, .517 (W.D. Texas 
1968). 



12 / See also. State v. Whitlow , supra , at 775 where it was 

stated that: 

"If a defendant is capable mentally of 
cooperating to the extent deemed necessary by the 
doctors, and he fails or refuses to do so, on motion 
of the state the defense psychiatric testimony shall 
be limited to the same extent . . . . " 

23. 



B. THE TRIAL COURT DID NOT ERR BY 

INSTRUCTING THE JURY ON THE 
DEFENSE OF INSANITY IN THE TERMS 
OF THE TEST PRESENTLY APPROVED 
BY THE UNITED STATES COURT OF 
APPEALS FOR THE NINTH CIRCUIT, 
NAMELY THAT INSTRUCTION CONTAINED 
IN MATHES AND DEVITT, FEDERAL JURY 
PRACTICE AND INSTRUCTIONS, §10.14. 



The Underlying Rationale Expressed 
in Sauer v. United States , 341 F. 2d 
640 (9th Cir. 1957), cert, denied , 
354 U. S. 940 (1957) Remains Viable 
Today. 



Defendant urges that this Court adopt the insanity test 
proposed by the American Law Institute which provides as 
follows: 

" (1) A person is not responsible for 

criminal conduct if at the time of such conduct 
as a result of mental disease or defect, he lacks 
substantial capacity either to appreciate the 
crimiinality [wrongfulness] of his conduct or to 
conform his conduct to the requirements of the 
law. "11/ 

In Sauer v. United States , supra, this Court refused to 
depart from the insanity test approved by the United States 



1^/ MODEL PENAL CODE, §4. 01 (Proposed Official Draft 

1962); See Supplemental Record on Appeal, "DEFENDANT'S 
PROPOSED SPECIAL JURY INSTRUCTION NO. 1". 



24. 



Supreme Court in the case of Davis v. United States , 165 U.S. 

373 (1897). The test approved in Davis v. United States , supra 

at 378 was expressed as follows: 

" The term 'insanity' as used in this 
defense means such a perverted and deranged 
condition of the mental and moral faculties as 
to render a person incapable of distinguishing 
between right and wrong, or unconscious at 
the time of the nature of the act he is committing, 
or where, though conscious of it and able to 
distinguish between right and wrong and know 
that the act is wrong, yet his will, by which 
is meant the governing power of his mind, has 
been otherwise than voluntarily so completely 

destroyed that his actions are not subject to it, 

14/ 
but are beyond his control." — 

Such a formulation was, in essence, the instruction 
given below [R. T., pp. 621-622]. Although in Sauer v. United 
States, supra, the Court dealt with a proposed adoption of the 
test enunciated in Durham v. United States , 214 F. 2d 862 
(D.C.Cir. 1954), its language is equally applicable in the 
present case. The Court in Sauer v. United States, supra. 



14 / This test is commonly referred to as the "M'Naghten 

plus irrestible impulse test". 



25. 



recognized at page 650 that 

"... there is another, and possibly 
the most significant reason, why this Court 
must refuse to modify existing law. Many 
observers implicitly assume in their criticism 
of present law that if the accused is set free 
on the criminal side that he will be confined 
on the civil. Unfortunately that is not the 
case. If it were, this court might be much 
more disposed to alter its current views. 
The choice today in this jurisdiction is not 
between confinement and commitment, but 
rather between confinement and freedom. " 

The Sauer Court therefore concluded at page 652 that 
" . . . it is not for this court to under- 
take a drastic revision in the concept of 
criminal responsibility, a task which would 
necessitate a searching analysis of philosophies, 
purposes, and policies of the criminal law, and 
which might substitute freedom of insane per- 
sons for either confinement or commitment. 
If change there is to be, it nnust conne from a 
higher judicial authority, or from the Congress. " 

The above-quoted reasoning of the Court in Sauer v. 

26. 



United States, supra, retains its validity today, as no federal 
commitment procedure exists, with the exception of that of the 
District of Columbia, by which an accused, acquitted on the 

grounds of mental irresponsibility, would be subjected to formal 

15/ 
observation and treatment. — 

An acceptable standard of responsibility in the federal 
courts, however verbalized, must in the last analysis, reflect 
the moral judgment of the community as to whether it is just to 
punish a defendant in view of his mental condition at the time of 
the crime. Basically, this standard flows from the pre- 
suppositions of our Judeao-Christian heritage that punishment 
properly may be imposed only upon a free agent, acting with a 
guilty mind, and, conversely, that one whose power of free 
choice -- i. e. , whose moral sensibilities are overborne as a 
consequence of mental disease -- may not ethically be the object 
of society's censure. This fundamental premise springs from 
society's paramount interest in civilized self-preservation. In 
order to survive, a civilized community must assure that those 
who have defied its fundamental rules for the protection of 
persons and property- -whether they have done so as a result of 



15 / See D. C. Code Ann. §24-301(d) which provides as follows: 

"if any person tried upon an indictment or 
information for an offense, or tried in the Juvenile 
Court of the District of Columbia for an offense, 
is acquitted on the ground that he was insane at 
the time of its commission, the oourt shall order 
such person to be confined in a hospital for the 
mentally ill. " 



27, 



mental illness and are in need of psychiatric care, or freely and 
with a guilty mind- -are deterred from breaking them again. A 
workable standard of insanity must, therefore, accommodate both 
our moral sense of justice and our concern for safety and order; 
it must, in short, impose blame only when it is nnorally conscion- 
able to do so, and, at the same time, avoid wherever possible the 
release of law-breakers who, while they may have emotional and 
mental problems, could have conformed to the requirements of 
law had they but exercised their existing thought processes and 
capacity for self restraint. 

This standard -- which makes moral blameworthiness the 
touchstone of whether to place an individual in restraint or to give 
him his liberty -- might be subject to relaxation if there were a 
choice between convicting and imprisoning an accused raising the 
insanity defense, and acquitting him and placing him in a mental 
institution for exannination and treatment; for then either disposi- 
tion would avoid the immediate release of one who might as a 
consequence of his mental illness repeat his pattern of antisocial 
conduct. Such circumstances, in which both the individual and 
community would gain from expert therapy in the setting of a 
mental hospital, might justify a treatment, rather than morally 
oriented standard of criminal responsibility. Such a possibility, 
however -- hospitalization and formalized treatment of a defendant 
acquitted on grounds of mental irresponsibility -- while available 
in some form or another in the vast majority of the states and in 
the District of Columbia is not available in other federal 

28. 



jurisdictions. In this Circuit, as in nine other Circuits, the 
choice, where an insanity defense is interposed, lies only 
between sending an accused to prison, with its limited oppor- 
tunities for concerted psychiatric treatment, or setting him free 
of any federal restraint. It is not meant to be implied that because 
of these narrow choices psychiatric trial testimony in the federal 
courts should be restricted or that a jury should be concerned 
only with questions of "right and wrong". On the contrary, the 
Government proposes the widest latitude for expert testimony and 
believes that in passing on claims of insanity the jury should be 
directed in the clearest possible terms to evaluate an accused's 
entire personality -- i. e. , his capacity for choice and his ability 
to control his conduct, as well as his knowledge of the nature and 
meaning of his acts and his conscious awareness of those acts. 
The Government urges only that the immediate consequences of 
an acquittal in the federal courts -- the freeing of the accused 
from restraint -- should have a critical bearing on the choice of 
an appropriate standard of responsibility; it should tip the scales 
in favor of an approach which retains as its core the concept of 
moral responsibility. 

Where a finding of not guilty by reason of insanity usually 
results not in a defendant going free of societal control, but in 
the restraint of hospitalization, there is more leeway for the 
adoption of a test which rests to a measurable degree on purely 
medical considerations. For exanriple, a finding of insanity in 
the District of Columbia results not in a defendant's immediate 

29. 



freedom, but in his confinement in a mental hospital at least for 
a determination of present mental competency and dangerousness. 

The interest in public safety and security would strongly 
militate against the adoption of a medically oriented standard 
where no corresponding system of commitment statutes are in 
force at all. Accordingly, when the issue of insanity is raised 
at a criminal trial held in a federal district court outside the 
District of Columbia, the crucial choice is not between imprison- 
ment and hospitalization. The much more difficult issue is 
raised of whether to impose the restraint of imprisonment or 
chance the danger of a repetition of anti- social behavior by 
immediate release of the defendant into the community whose 
laws he has just violated. In such circumstances, the public 
safety, as well as the humanitarian desire to treat the mentally 
ill wrongdoer, reinforce the need to retain a morally oriented 
standard of responsibility. 

The necessarily close relationship and interaction between 
the insanity defense and the ready availability of commitment 
procedures has been various commented upon. As Mr. Justice 
Clark trenchantly pointed out in Lynch v. Overholser , 369 U. S. 
705, 720 (1962) [dissenting on other grounds] that the 
"... insane offenders are no less a 
menace to society for being held irresponsible, 
and reluctance to impose blame on such indivi- 
duals does not require their release. The 
community has an interest in protecting the 

30. 



public from antisocial acts whether committed 
by sane or insane persons. We have long 
recognized that persons who because of mental 
illness are dangerous to themselves or to 
others may be restrained against their will in 
the interest of public safety and to seek their 
rehabilitation. ..." 

In sum, until there are uniform commitment procedures 
applicable to acquitted defendants in federal criminal cases -- 
by Congressional enactment or some other formalized state- 
federal arrangement -- the test for insanity in the federal courts 
in most cases realistically involves the determination, not of 
who shall go to a mental hospital and who shall go to prison, but 
of who shall go free rather than be held in restraint. Since that 
is the ultimate issue, the insanity test must, of necessity, rest 
on considerations of moral blameworthiness. 

It is worthy to note in this regard that the American Law 
Institute, in a related section of the MODEL PENAL CODE, pro- 
vides for mandatory commitment to a mental institution of a defen- 
dant acquitted under an insanity plea. i_r.' In such a statutory 



16 / MODEL PENAL CODE, §4. 08 (Proposed Official Draft 

1962) which provides as follows: 

"When a defendant is acquitted on the ground 
of mental disease or defect excluding responsibility, 
the court shall order him to be committed to the 
custody of the Commissioner of Mental Hygiene 
[Public Health] to be placed in an appropriate 
institution for custody, care and treatment. " 

31. 



framework -- where there need be no concern that a finding of not 
guilty risks the danger of an immediate repetition of anti-social 
behavior by the acquitted defendant -- there may be justification 
for the adoption of a test which lends itself to the acquittal of the 
medically ill, albeit morally blameworthy defendant, on the theory 
that both the accused and society will be better served by treatment 
of the accused in a mental hospital instead of his incarceration in 
prison. 

2. The Holding of Sauer v. United States , 

supra . Has Been Consistently Re- 
affirmed in This Circuit, And There 
is Nothing in the Record of This Case 
Which Justifies a Departure From 
Those Rulings. 

In Smith v. United States , 342 F. 2d 725 (9th Cir. 1965), 
the defendant therein requested an instruction based on MODEL 
PENAL CODE §4. 01. A clinical psychologist had testified that 
Smith was a paranoid schizophrenic; that his condition was severe, 
having begun during adolescence, and was operative at the time 
of the crime; that his actions were beyond his control; at the time 
of the crime Smith did not know right from wrong; and as a result 
of the disease which Smith suffered, he was not possessed of 
substantial capacity to conform his conduct to the requirement of 
the law. Cf. Smith v. United States , supra, at 726. After 
reviewing the decision in Wion v. United States , 325 F. 2d 420 
(10th Cir. 1963), cert, denied 377 U. S. 946(1964), which adopted 



32. 



V 



the MODEL PENAL CODE §4. 01 formulation, the Smith court 
rejected said decision after not finding it "sufficiently persuasive 
to change the rules of this Circuit as set forth in Sauer . " Smith 
V. United States , supra at 726. 

In the recent decision of Ramer v. United States , C. A. 
21,985 (9th Cir. May 15, 1969), a panel of this Circuit once 
again rejected a request to depart fronn the insanity test expressed 
in Sauer v. United States, supra . In Ramer v. United States , 
supra at 20, the court recognized that there was 

"evidence before the jury from which it might 
have been concluded that, while the appellant 
knew right from wrong and understood the 
nature of his act, he still, because of the 
condition of his mind, committed acts which 
were beyond his control, i. e. , were uncontrol- 
able acts . . . . " — 

The defendant therein had requested a jury instruction in 
the terms of the MODEL PENAL CODE §4. 01 formulation. 
Ramer v. United States , supra at 1 1 , n. 10. The trial court in 
Ramer had rejected the proposed instruction and instructed the 
jury in almost the identical terms as were employed by the trial 



17 / The psychiatrists who testified had concluded that Ramer 

suffered from a character disorder which was usually 
manifested by "poor impulse control". Ramer v. United States , 
supra at 20. 



33. 



N 



herein. Ramer v. United States , supra at 10, n. 8. The Ramer 
Court, after reiterating its holding in Maxwell v. United States, 
368 F. 2d 735 (9th Cir. 1966) that the instruction given embodies 
the "uncontrollable act" test, found no error had been committed 
and that said instruction was "as favorable to the appellant as he 
was entitled". Ramer v. United States , supra at 20. 

The Government submits that a review of the testimony of 
Drs. Hacker and Cohn, as set forth in Appellant's Opening Brief 
at pages 19-21, reflects no facts or opinions upon which a 
meaningful distinction could be drawn between the case herein 
and those of Smith v. United States , supra , and Ramer v. United 
States, supra. The defendant has not adequately demonstrated 
that the evidence in this case warrants a departure from the long- 
approved insanity test of this Circuit, nor has he demonstrated 
that prejudice resulted from a failure to give his proffered 
instruction. Under such circumstances, it is urged that the case 

herein is not an appropriate one to adopt a new formulation with 

18/ 
respect to mental culpability. — 



18 / It should be noted that this Circuit has also considered 

and refused to reject the holding in Sauer v. United States , 
supra, in the following cases: Johnson v. United States , 406 
F. 2d nil (9th Cir. 1969); Oliver v. United States, 396 F. 2d 434 
(9th Cir. 1968); Ramer V. United States . 390 F."2d 564 (9th Cir. 
1968); and Church v. United States, 390 F. 2d 564 (9th Cir. 1968). 



34. 



CONCLUSION 

Based on the foregoing discussion, the Government 
respectfully submits the following conclusions: 

(1) No error was committed by the trial court in 
conditioning defendant's raising of his insanity defense upon his 
submitting to a mental examination by a court -appointed psychiatrist 
and his affording said psychiatrist such cooperation and informa- 
tion as may be required in properly conducting said examination, 

(2) The trial court properly refused defendant's 
proposed insanity instruction and correctly instructed the jury as 
to the test applied in the United States Court of Appeals for the 
Ninth Circuit. 

"The right and wrong test has withstood the 
onslaught of critics, not because it is scientifically 
perfect, but because the courts regard it as the best 
criteria yet articulated for ascertaining criminal 
responsibility which comports with the moral feelings 
of the community. " 

Sauer v. United States , supra at 649. 

Respectfully submitted, 

WM. MATTHEW BYRNE, JR. 

United States Attorney 
ROBERT L. BROSIO 

Assistant U. S. Attorney 
Chief, Criminal Division 
ALAN H. FRIEDMAN 

Assistant U. S. Attorney 

Attorneys for Appellee 
United States of America 

35. 



NO. 22660 



IN THE UNITED STATES COURT OF APPEA 
FOR THE NINTH CIRCUIT 



ms.j. 



'69 



LEROY MORRIS COCKRELL and 
IVY DELL COCKRELL, 



Petitioners and Appellants, 



V. 



E. J. OBERHAUSER and 
IVERNA CARTER, 



Respondents and Appellees. 



.) 



Filed 



IIIM 



2 01969 



APPEAL FROM THE UNITED STATES DISTRICT COURT 
CENTRAL DISTRICT OF CALIFORNIA 

PETITION FOR REHEARING 
AND 
SUGGESTION FOR REHEARING IN BANC 



THOMAS C. LYNCH, Attorney General 
WILLIAM E. JAMES 

Assistant Attorney General 
ROSE-MARIE GRUENv^ALD 

Deputy Attorney General 

600 State Building 

Los Angeles, California 90012 

Telephone: 620-2383 



Attorneys for Appellees 



TOPICAL INDEX 

Pages 
QUESTIONS PRESENTED 1-2 

1. Applicability Under Fifth 
Amendment and Griffin v. 

California , 380 U.S. 509 1-2 

2, Applicability Under Sixth 
Amendment and Bruton v. 

United States , 391 U.S. 123 2 

ARGUMENT 2-9 

I 2-5 

II 6-9 

CONCLUSION 10. 



1. 



LIST OF AUTHORITIES CITED 

Cases Pages 

Bruton v. United States, 391 U.S. 123 1, 2 6 

7, 8, 9' 

Delli Paoli v. United States, 352 U.S. 232 7 

Escobedo v. Illinois, 378 U.S. 478 2 

Griffin v. California, 380 U.S. 609 1, 3, 

4, 5 

Johnson v. New Jersey, 384 U.S. 719 2 

Krulewitch v. United States, 336 U.S. 440 7 

McClain v. Wilson, 370 Fed. 2d 369 4 

People V. Gant, 252 Cal. App. 2d 101 7 

People V. Morales, 263 Cal. App. 2d 368 7 

Pointer v. Texas, 380 U.S. 400 8, 9 

Constitutions 
UNITED STATES CONSTITUTION 

Fifth Amendment 1, 4, 5 

Sixth Amendment 2, 6, 7 

Rules of Court 
RULES OF APPELLATE PROCEDURE 

Rule 35(b) 1 



4 



« 



IN THE UNITED STATES COURT OF APPEALS 
FOR THE NINTH CIRCUIT 



LEROY MORRIS COCKRELL and 
IVY DELL COCKRELL, 



Petitioners and Appellants, 



E. J. OBEPJiAUSER and 
IVERNA CARTER, 



Respondents and Appellees. 



NO. 22560 



PETITION FOR REHEARING AND 
SUGGESTION FOR REHEARING IN BANC 

TO THE HONORABLE STAI^LEY N, BARNES, AND SHIRLEY M. HUFSTEDLER, 
CIRCUIT JUDGES, AND GUS J. SOLOMON*, DISTRICT JUDGE: 

Appellee respectfully requests a rehearing for the 
purpose of reconsiaaration of the applicability to this case 
of the principles enunciated in Griffin v. California (1965), 
380 U.S. 609, 85 S. Ct. 1229, and Bruton v. United States 
(1968), 391 U.S. 123, 88 S. Ct. 1620, upon which the reversal 
as to Leroy Morris Cockrell was based. 

Appellee respectfully suggests that a rehearing in 
banc would be appropriate because the questions involved are 
of exceptional importance. Rule 35(b), Rules of Appellate 
Procedure, 

QUESTIONS PRESENTED 

(1) Is Griffin, which under the Fifth Amendment 
proscribes comment or instructions to the jury in a trial by 



* Chief Judge, U.S. District Court, Portland Oregon, 
sitting by designation. 

1. 



jury on inrerences no oe arawn concerning a aerenaanc s raii- 
ure to testify at trial applicaole where (a) the defendant 
testifies; (b) trial v^as by the court and not by jury; (c) 
there was no comment; (d) in a pre-Escobeda=' trial tnere was 
testimony that the defendant remained silent in the face of 
an extra-judicial accusation by a co-conspirator after being 
given an opportunity to speak; and (e) the defendant testi- 
fied at the trial that he remained silent on the advice of 
his attorney? 

(2) Is B ruton , which holds that a defendant's 
Sixth Amendment right of confrontation has been violated in 
a joint trial by the admission of a confession by a 
co-defendant made out of his presence and inadmissible hear- 
say as to him applicable where (a) the subject confession 
was made in the presence of the defendant; (b) one of the 
crimes charged and to which the confession related was a 
conspiracy; and (c) at the time of trial the confession was 
admissible against the defendant under traditional rules of 
evidence? 

ARGUMENT 
I 
We respectfully request reconsideration by this 
Honorable Court of its opinion, v^hich holds that an accusa- 
tory confession by co-defendant Phillips in Leroy's presence, 
together with evidence that the officer asked Leroy what he 
had to say about "that," and that Leroy remained silent, was 

1. Escobedo v. Illinois (1964), 378 U.S. 478; 
Johnson v. New Jersey (1966), 384 U.S. 719. 

2. 



incorrectly admitted on the theory that Leroy's silence in 
the face of an accusatory statement was an implied admission 
of guilt, and that receipt of that testimony violated Leroy's 
Fifth Amendment privilege against self-incrimination under 
Griffin v. California (1965), 380 U.S. 609. 

Appellee respectfully submits that mere evidence 
of silence in the face of an accusation is not within the 
Griffin rule, and that the holding by the United States 
District Court in its Order Denying Petition for Writ of 
Habeas Corpus was correct in stating that "the requirements 
of [ Griffin ] are not applicable" to this case. 

Griffin is concerned only with comment or 
instructions to a jury on the inferences it should draw from 
the fact that a defendant refuses to testify. It specifi- 
cally states, 

". . . . What the jury may infer [from evidence 
of failure to testify] , given no help from the 
court, is one thing. What it may infer when the 
court solemnizes the silence of the accused into 
evidence against him is quite another. • , . 



II 

... 



". . . . We . . . hold that the Fifth Amendment, 
in its direct application to the Federal Government, 
and.in-*its bearing on the States by reason of the 
Fourteenth Amendment, forbids either comment by 
the prosecution on the accused's silence or 
instructions by the court that such silence is 

3. 



evidence of guilt." (Emphases added.) Griffin 

V. California (1965), 3C0 U.S. 609, 614, 615, 

California's voluntary extension of the Griffin 

rule does not require retroactive enforcement by the federal 

courts, McClain v. Wilson , 370 Fed, 2d 369, 370 (1966, 

Ninth Circuit). 

There is nothing in the G riffin decision which has 

any detrimental application to the facts of the Cockrell case. 

The evidence that Leroy remained silent in the face of an 

accusation was a ff:.ct as properly before the trier of fact 

as it v;as evident to the jury in Gr iffin , that Griffin 

failed to take the stand in the face of the testimony against 

him. Evidence of the mere omission, therefore, in response 

to a direct question, where relevant and material, cannot be 

inadmissible on the basis of the Fifth Amendment. It is 

evidence of conduct, not testimony. Griffin in no way 

intimates that it is error, nor could it on its facts, since 

Griffin's omission to testify in response to the damaging 

testimony against him was a fact clearly evident to the jury. 

The jury could infer v/hat it chose. 

Griffin in no iiJ'ay proscribes evidence of silence, 

nor does it in any way inhibit the inferences that may 

naturally be drawn therefrom. Neither does it hold that the 

prosecution must not present evidence against a defendant if 

he refuses to testify. Yet that is the effect of the Cockrell 

application, v/hich holds that since he refused to speak, both 

the statement by Phillips incriminating him and evidence of 

his silence were erroneously admitted, 

4, 



Silence in the face of an accusation, together with 
an opportunity to explain or deny, is evidence of conduct 
from V7hich the inference that it is an implied admission of 
guilt may reasonably be drawn. It is, however, only an infer- 
ence, and may be refuted. Leroy did refute it, and testified 
not only that he was silent only because his attorney had 
told him to on a prior occasion, but also denied the sub- 
stantive matter contained in Phillips* accusation. The court, 
therefore, as the trier of fact, was faced with no more than 
a conflict in the evidence, a matter of credibility, a ques- 
tion of fact and not of law. 

In other words, a defendant cannot claim that his 
assertion of his privilege not to be compelled to testify 
under the Fifth Amendment protects him from prosecution, 
neither can he claim protection from natural inferences to 
be drawn from his failure to controvert or explain the evi- 
dence against him when given an opportunity to do so, whether 
this failure is in or out of court, "Wo constitution can 
prevent the operation of the human mind," Griffin , p. 1237 
(dissent by Mr. Justice White), 



5. 



II 

Appellee further respectfully requests a rehearing 
for the purpose of reconsidering the applicability of Bruton 
V. United States (1968), 391 U.S. 123; 88 S.Ct. 1620. 

The opinion of this court holds thut the admission 
against Leroy Cockrell of Phillips' confession violated his 
Sixth Amendment right of confrontation which compels reversal 
of his conviction. Reference here is to Phillips ' second 
confession which was made in Leroy 's presence, since the 
first vjas not admitted against him (Rep, Tr. pp. 198, 201- 
203) and as the opinion states as to Ivy Cockrell the Bruton 
rule does not apply because the trial was by court and not 
by jury and "Nothing in Bruton suggests that a judge is 
incapable of applying the law of limited admissibility which 
he has himself announced," 

The second confession, made in Leroy 's presence, 
was admitted against him (Rep. Tr. pp. 203-207), and is the 
subject herein. 

This confession was, of course, admissible against 
Phillips, It was relevant, however, not merely for that 
reason, but as a declaration by a co-conspirator concerning 
a conversation between herself and Leroy made during the 
conspiracy in furtherance of the conspiracy to sell mari- 
juana, one of the counts with which they were charged. 
It was thus admissible against Leroy as a well-established 
exception to the hearsay rule. 



6. 



". . . [I]t is firmly established that where made 
in furtherance of the objectives of a going con- 
spiracy, such statements are admissible as 
exceptions to the hearsay rule. This prerequisite 
to admissibility, that hearsay statements by some 
conspirators to be admissible against others must 
be made in furtherance of the conspiracy charged, 
has been scrupulously observed by federal courts," 
Krulewitch v. U nited States (1949), 336 U.S. 440, 
at 443-444; 69 S.C. 715. See Peopl e v. Gant, 252 
Cal. App. 2d 101, 110, 60 Cal. Reptr. 154; People 
V. M orales . 263 Cal. App, 2d 368, 374-375, 69 Cal. 
Reptr. 402. 

V/here a party to a confession or admission, as 
Leroy was in this case, is himself present in court and can 
and does, as he did, testify in explanation or contradiction 
of the prior statement or conduct, no exclusionary rule can 
reasonably be invoked on the basis of a violation of his 
Sixth Amendment right of confrontation. 

In Bruton, the evidence was admissible against a 
codefendant, but inadmissible against Bruton . The jury was 
instructed that "a confession made outside of court by one 
defendant may not be considered as evidence against the other 
defendant, who was not present and in no way a party to the 
confession," (emphasis added) and that it should disregard 
the therefore inadmissible hearsay evidence. This was in 
accord with the rule enunciated in Delli Paoli v. Ur.ited 
States (1957), 352 U.S. 232, 77 S. Ct. 294, 1 L.Ed. 2d 278, 

7. 



which Bruton overruled. 

The Court in Bruton stated as follows in footnote 
3, 391 U.S. 123, at p. 128: 

"VJe emphasize that the hearsay statement in- 
culpating petitioner was clearly inadmissible 
against him under traditional rules of evidence, 
(Citations.) There is not before us, therefore, 
any recognized exception to the hearsay rule insofar 
as petitioner is concerned and we intimate no view 
whatever that such exceptions necessarily raise 
questions under the Confrontation Clause, (Citations.)" 
We have in the testimony here under discussion a 
confession, which was a declaration made by an unavailable 
witness (an exception to the hearsay rule) , relating a con- 
versation between the declarant and the defendant Leroy 
during the conspiracy and in furtherance thereof (an excep- 
tion to the hearsay rule) , made in the presence of the 
defendant Leroy (an exception to the hearsay rule) , The 
testimony was, therefore, admissible against both the 
declarant and Leroy under traditional rules of evidence. 

Pointer v. Texas (1965), 380 U.S. 400, was decided 
two years after the trial in this case but eight months prior 
to the decision by the California Supreme Court in the case. 
No issue under Pointer has ever before been suggested until 
mere citation to the case in the opinion upon which this 
rehearing is requested. The State courts have never had an 
opportunity to rule on the applicability of either Pointer 

8. 



or Bruton herein and state remedies, therefore, have mani- 
festly not been exhausted. 

Even if Pointer has any application to this case, 
which we in no way concede, there still remain tT«70 other 
recognized exceptions to the hearsay rule relating to the 
fact that this was a conspiracy trial and Leroy was present 
at the confrontation. 

In reversing as to Leroy, on tenuous technical 
grounds, the court is releasing a narcotic dealer who was 
found in possession of enough marijuana to make 30,000 
cigarettes. Furthermore, Leroy was convicted of three separ- 
ate counts, sale of marijuana (Count II), possession of 
marijuana for sale (Count VI), and conspiracy to sell mari- 
juana (Count VII). The Court has failed to state on which 
counts the convictions are reversed by the reversal of the 
denial of the writ. The confession-accusation is clearly 
not applicable to Count VI. 



9. 



i 



CONCLUSION 

For all of the foregoing reasons, questions of 
exceptional importance relating to evidence admissible by 
the prosecution in its proper function as a representative 
of the People in a criminal trial, a rehearing is respect- 
fully requested. 

Respectfully submitted, 

THOMAS C. LYNCH, Attorney General 

WILL;Eq[\M E. JAMES, 

Assistant Attorney General 



RG:ot:ha 
CR LA 
68-30 
6-18-69 






^d 



ROSE -MARIE GRU»JALD, 

Deputy Attorney General 

Attorneys for Appellees 



10. 



No. 22,708 



J 



IN THE UNITED STATES COURT OF APPEALS 
FOR THE NINTH CIRCUIT , 



UNITED STATES OF AMERICA ""^ 





Appellant, 



V. 

STADIUM APARTMENTS, INC., ET AL, 



Appellee . 



ON APPEAL FROM THE UNITED STATES DISTRICT COURT 
FOR THE DISTRICT OF IDAHO 



BRIEF FOR AMICUS CURIAE --STATE OF IDAHO AND 
STATE OF WASHINGTON 



STATE OF IDAHO 
Robert M. Robson 

TATE OF WASHINGTON C I I FT r-\ Attorney General 

;:.ADE GORTON, f* I L t L/ 

^-torney General GEORGE C. DETWEILER 

JUN 1 8 1969 Assistant Attorney General 



WM. B. LUCK, CLERK 



INDEX 

Page 

Gtatement of the case. >.»*........., o,,,. ^ 1 

I. Nature of the case» .>,...,..... ^ ., ^ , 1 

II. Statement of facts. ..,...,....„ .o.. „ 2 

i^0nCJ-LiS3_ori%- « 1). » tf o c w ij o • V.' • o o .ft c ^j w • • ^ o • ■> • 9 



CITATIONS 
;ases : 



Brooks V. Woods, 181 F„2d 716 (9th Cir. 1950) 



o •> * • 



Bunn V. Werner , 93 U^S.App.D.C. 363, 210 F.2d 730 

\JLyjH-y« * a « * » J • u » u • c < . i , - , a 4-jOj9 

Fink V. Continental Foundry u Machine Co. , 

240 F.2d 396 (7th Cir. 1957). , . 5/., 7, 8 



Land O'Lakes Creameries, Inc., v. Commodity Credit 

Corporation , 308 F.2d 604 (8th Cir, 1962) ..-.,. 3,4 

Pacific Inter-Club Yacht Assn. v. Morris , 
288 F„2d 886 (9th Cir, 1961) .... 



J J • • 



RoRers v. Union Pac . R. Co, , 145 F.2d 119 (9th Cir 

19^'-4) 



«t>U«V«^-StfA«ifC'Alf.>« 



SiRnallite Fuse Co. v. Fuse Indicator Corp , 174 F , 2d 
319 (3rd Cir. 1949) , , . < , . . 

I-n-oeldin v. vrneeler , 230 F,2d 293 (9th Cir,, 1950) . 



tatutes : 

23 U.CC. Sec, 2111, . . 



a --^ % <i? 



I.C, Sec. 11-402 2,7 



IN THE UNITED STATES COURT OF APPEALS 
FOR THE NINTH CIRCUIT 



No. 22,708 

UNITED STATES OF AMERICA, 

Appellant, 

V, 

STADIUM APARTMENTS, H!C. , ET AL. 

Appellee . 



ON APPEAL FROM THE UNITED STATES DISTRICT COURT 
FOR THE DISTRICT OF IDAHO 



BRIEF FOR AMICUS CURIAE- -STATE OF IDAHO AND 
STATE OF WASHINGTON 



STATEMENT OF THE CASE 

I. 

Nature of the Case 



j This case Involves an appeal by the United States from a decree 
ntered against the Appellee and in favor of the United States, as 
ssignee of a mortgagee, in which the United States District Court 



of Idaho, Southern Division, provided for a one-year period of re- 
demption, after foreclosure sale, pursuant to the law of the State 
of Idaho. (Rptr's. Tr. pp. 22-24 and R. p. 71) The decree was 
entered by default, the Appellee making no appearance in the trial 
court and the Appellee has not filed a brief in this appeal. 

Although generally obtaining the relief sought in the trial 
court, the United States bases its appeal upon alleged error by the 
court below in incorporating within its decree a provision allow- 
ing the Appellee a period of one year after the Marshall's sale in 
which to redeem the mortgage, basing that provision upon an Idaho 
statute allowing a one-year period for redemption of mortgages. 
I.e. Sec. 11-402. 

II, 
Statement of Facts 

On November 30, 1949, Stadium Apartments, Inc., executed a 
lortgage as mortgagor with Prudential Insurance Company of America 
Is mortgagee. This mortgage was insured by the Federal Housing 

I 

administration. (Rptr's. Tr. p. 3 and R. pp. 8-16) Following 

i 
ssignment of the mortgage by Prudential to the United States, and 

ollowing default by the mortgagor, the United States commenced an 

ction to foreclose the mortgage. A decree of foreclosure by de- 

ault was obtained by the United States against Stadium Apartments, 

I 
ic. 

il - 2 - 



At no time in this case, either In the trial court or before 
this court on appeal, has an appearance been made by Stadium Apart- 
ments, Inc., nor by any other named Defendant. 

ARGUIIENT 
As amicus curiae, it is our duty to assist this court in 
disposing of this appeal. In discharging this duty, we respect- 
fully submit that this cause is in the nature of an ex parte appeal, 
in which no real controversy exists, upon points of law which are 
moot and which, if they are to be determined at all, should be 
decided in a contested proceeding between two adverse parties. Any 
alleged errors by the trial court in its application of the one-year 
oeriod of redemption are harmless errors because it does not appear 
from the record how the United States was harmed thereby It is 
)rovided in 28 U.S,C. Sec, 2111 as follows: 

"On hearing of any appeal or writ of certiorari 
in any case, the court shall give judgment 
after an examination of the record without re- 
gard to error or defects which do not affect 
I the substantial rights of the parties," 

'' Harmless error in Conclusions of Law entered by the trial 

udge will not justify reversal of the judgment below. In Land 

''Lakes Creameries, Inc., v. Commodity Credit Corporation , 308 F.2d 

04 (8th Cir. 1962), the parties had agreed in their sales contract 

arbitration by the Contract Disputes Board of Commodity Credit. 

- 3 - 



Appellant urged that the District Judge erred in considering legal 

doctrine not presented before the Contract Disputes Board. On appeal 

the Court of Appeals for the Eighth Circuit said: 

"By its Conclusion of Law No. VI the District 
Court did not change modify or vary the amount 
of CCC's damages as found and determined by 
the Contract Disputes Board. In the statement 
of that conclusion it is clear that the District 
Court did not sustain the decision of the 
Contract Disputes Board *on a different legal 
doctrine* than that used by the Agency in ascer- 
tainment of the correct amount of damages allowed 
to CCC. * * * But if there was any error committed 
by the District Court in its statement of Con - 
clusion of Law No. VI supra, it could be no more 
than harmless error and such error would not 
warrant any reversal of the judgment in this 
case . Rule 61, F.R. Civ. P., Title 28 U.S.C.A." 
(emphasis added) 

This court and various other circuits have uniformly held 

:hat no opinion will be delivered where no real controversy exists, 

/here the appeal is moot and where no point -of lav7 or fact is in 

ontroversy, the determination of which would be helpful in a sub- 

equent case. Pacific Inter-Club Yacht Assn. v. Morris , 288 F.2d 886 

;i9th Cir. 1961); Wheeldin v. Wheeler , 280 F.2d 293 (9th Cir. 1960); 

1 

unn V. Werner . 93 U.S.App.D.C, 363, 210 F.2d 730 (1954); Signallite 
jse Co. V. Fuse Indicator Corp . 174 F.2d 819 (3rd Cir. 1949). 

Where the course of events following judgment by the trial 
ourt and prior to argument on appeal renders the appeal moot because 
he appellant cannot obtain relief from the Appellate Court, the 



4 - 



appeal will be dismissed. Such an intervening event was present in 
both the case at bar and in the case of Fink v. Continental Foundry 
& Machine Co ., 240 E2d 369 (7th Cir. 1957). In that case the Dis- 
trict Court denied the injunctive relief sought by minority share- 
holders of Continental Foundry and dismissed the case on the merits. 
Plaintiffs had sought to enjoin the directors and officers of Con- 
tinental Foundry from selling the corporate assets to Blaw-Knox 
Company, thereby liquidating Continental Foundry. On the same day 
on which the District Court denied the injunction, defendant direc- 
tors, pursuant to contract, liquidated Continental Foundry and sold 
its assets to Blaw-Knox, 

In delivering the opinion of the court, holding tlie appeal to 
be moot, Judge Wham stated as follows: 

"The general law, as well as the law in this 
circuit, has long been established that if 
pending an appeal an event occurs which 
renders it impossible for the appellate court 
to grant any relief or renders a decision un- 
necessary the appeal will be dismissed. 
Selected Products Corporation v. Humphries, ■'■ 
supra, citing many cases. The court went on to 
say (86 F.2d 823): 'There must be an actual 
controversy; an appeal will not be entertained 
to determine moot questions, and it will be 
dismissed, therefore, if by act of the parties 
or otherwise the circumstances have so changed 
that is is impossible or unnecessary for the 



.Selected Products Corporation v. Humphries , 36 F.2d 821 (7th Cir. 
1936) . 

- 5 - 



appellate court to grant relief.' Among the 
cases that were cited in support of the above 
principle is American Book Co. v. State of 
Kansas, 193 U.S. 49, 24 S.Ct. 394, 48 L.Ed. 
613, which, in turn, cited Mills v. Green, 
159 U.S. 651, 16 S.Ct. 132, 133, 40 L.Ed. 
293, where the court said: 'The duty of this 
court, as of every other judicial tribunal, 
is to decide actual controversies by a judg- 
ment which can be carried into effect, and 
not give opinions upon moot questions or ab- 
stract propositions, or to declare principles 
or rules of law which cannot affect the matter 
in issue in the case before it . It necessarily 
follows that when, pending an appeal from a 
lower court, and without fault of the defendant, 
an event occurs which renders it impossible for 
this court, if it should decide the case in 
favor of the plaintiff, to grant him any 
effectual relief whatever, the court will not 
proceed to a formal judgment, but will dismiss 
the appeal,'" (emphasis added) 

The course of events between judgment and appeal in the Fink 

case and in the case at bar are analogous. In the former, corporate 

assets were sold to a purchaser following a dismissal of an action 

seeking an injunction against such a sale. When the matter reached 

1! 

the Court of Appeals, that court was faced with a fait accompli , 

the act sought to be enjoined had already been committed and relief 

<ias impossible. In the case at bar the United States District Court 

for the District of Idaho entered a foreclosure decree sought by 

:he United States against Stadium Apartments, Inc. and provided there- 

i-n that the defendant would have a period of one year in which to 

redeem the mortgaged property after sale pursuant to Idaho Statute, 



- 6 - 



I.e. Sec. 11-402. (Rptr's. Tr, pp 23-24 and R. p 71) The date of 
that sale is December 12, 1967. (R. 82-85) Thus, the redemption 
period as provided in the decree of the District Court would have 
ended on December 11 or 12, 1958— approximately seven months prior 
to the hearing of this appeal. The record does not disclose how 
the United States can succeed to any greater interest in the pro- 
,perty in question than it already has at the present time by pur- 

!| 
I 

suing this appeal. The period for redemption has expired and, 
according to the record, no event has occurred to defeat the United 
States from succeeding to complete ownership of the property. 
Matters not appearing in the record will not be considered by a 
Court of Appeals. Brooks Vo Woods . 181 F.2d 716 (9th Cir. 1950); 
Rogers v. Union Pac. R, Co ., 145 F.2d 119 (9th Cir, 1944). There is, 
therefore, no remedy which Appellant can obtain from this Court for 
the reason that Appellant already has what it is seeking to obtain. 

Upon these facts the decision and language of the opinion 
;in the Fink case are applicable and we urge that they provide a proper 
jpisposition of the case at bar. 

This appeal should be dismissed as moot for several reasons. 
First, as already indicated, the period for redemption of this mort- 
gage has passed and the record does not disclose how a determination 
^y this court of the propriety of providing for a period of redemp- 
tion could affect the interest of the United States in the property 

I 

- 7 - 



in question. Thus, in the language of the Fink case, ", . , pending 
an appeal an event occurs which renders it impossible for the appel- 
late court to grant any relief „ . »" 

Further, there is no actual controversy involved. Judgment 
in the district court was obtained by default without an appearance 
by the Defendant. Nor has the Defendant (Appellee) filed a brief 
nor indicated in any way that it will participate in this appeal; 
there is no party before this court claiming an interest adverse to 
that of the United States. In the language quoted in the Fink case, 
". . , there must be an actual controversy; an appeal will not be 
entertained to determine moot questions, and it will be dismissed, 
therefore, if by an act of the parties or otherwise the circumstances 
have so changed that it is impossible or unnecessary for the appel- 
late court to grant relief . . ," 

The case of Bunn v. Werner , supra, is also analogous to the 
case at bar. It involved a suit to enjoin foreclosure of certain 
real estate under a deed of trust securing an usurious note and to re- 
jform the note and the deed of trust. On appeal from the District 
Court, which had denied a preliminary injunction against a fore- 
closure sale, the sale had already been made. In a per curiam opin- 

jl 

ion the United States Court of Appeals of the District of Columbia 

stated as follows : 



- 8 - 



"When the appeal was argued counsel for each 
side said in open court that the foreclosure 
sale had taken place. It follows that this 
appeal must be dismissed as moot and the case 
remanded to the District Court for final hear- 
ing on the merits." 

Just as the foreclosure sale made moot any appeal from a 

denial of an injunction against such a sale in the Bunn case, so 

in the case at bar, the expiration of the one-year redemption period 

provided in the decree of the court below has rendered this appeal 

noot. 

CONCLUSION 
Because of the somewhat peculiar circumstances of this case, 
in that only one adverse party is participating in an appeal upon a 
Doint of law which, according to the record, does not affect the 
rights of that party as determined by the trial court, it is alto- 
gether fitting that we as an amicus curiae urge that this court may 
)roperly refuse to deliver what amounts to an advisory opinion on an 
bstract point of law, in an ex parte appeal. 

If, as the United States has urged, public policy demands that 
he issues it raises in this appeal be decided, this should be done 
an adversary proceeding in which an actual controversy exists. 



\. 



STATE OF IDAHO 
Robert M. Robson, 
STATE OF WASHINGTON Attorney General 

5LADE GORTON, >^ ^ f) ^f^ ' /7 

Attorney General By ^/^i^i-Zirt^ y(^ . . Ue-U^-i-&< ^ 

^ORGEyt, DETWEILER, 

Q Assistant Attorney General 

- y " 



^ 



CERTIFICATE OF MAILING 

I hereby certify that I have on this / H j-i day of June, 1969 
served the foregoing brief of Amicus Curiae upon the Appellant by 
placing two (2) true and correct copies of the same in the United 
States mail, postage prepaid, addressed to: 



Mr. Clarence D. Suiter 
Assistant United States Attorney 
District of Idaho 
550 West Fort Street 
Boise, Idaho 

ATTORNEY FOR APPELLANT 




-^^1 




•y. 



\- ^ ' 



'e 




GEORGE C. DETWEILER, Assistant 
Attorney General, State of Idaho 



NO. 22708 



ia? 1S69 



UNITED STATES COURT OP APPEALS 
FOR THE NINTH CIRCUIT 



UNITED STATES OF AMERICA^ 

Appellant, 



V. 



STADIUM APARTMENTS, INC. 
et al.. 

Appellees 



BRIEF 
OF THE STATE OP CALIFORNIA 
AS AMICUS CURIAE 

FILED 

JUN271969 
WM. B. LUCK, CLERK 



THOMAS C. LYNCH 
Attorney General 

BURCH PITZPATRICK 
Deputy Attorney General 

6000 State Building 

San Francisco, California 9^102 

Telephone: 557-3628 



Attorneys for Amicus Curiae 



TOPICAL INDEX 



INTRODUCTION AND STATEMENT OF THE ISSUE ON APPEAL 



Page 



ARGUMENT 2 

I. THE PERIOD OF REDEMPTION PRESCRIBED BY 
IDAHO LAW APPLIES TO THE FORECLOSURE 
IN THIS ACTION, BECAUSE CONGRESS 
INCORPORATED STATE MORTGAGE LIEN LAWS 
INTO THE NATIONAL HOUSING ACT RATHER 
THAN CREATING A SPECIAL FEDERAL MORTGAGE 
OR FEDERAL LIEN LAW 2 

II. THE ADOPTION OF A FEDERAL RULE ABROGATING 
THE STATE RIGHT OF REDEMPTION VIOLATES 
THE REGULATIONS UNDER WHICH THE MORTGAGE 
HEREIN WAS INSURED AND IS NOT EVEN 
AUTHORIZED BY THE MORTGAGE ITSELF 6 

III. THE CREATION OF A RULE ABOLISHING THE 
RIGHT OF REDEMPTION UNDER STATE LAW 
CONFLICTS WITH EXISTING FEDERAL CASE LAW 8 

IV. THE CREATION OF A FEDERAL RULE ABROGATING 
THE RIGHT OF REDEMPTION IS NOT NECESSARY 
TO PROTECT NATIONWIDE MORTGAGE INSURANCE 
PROGRAMS AND WOULD DISRUPT STATE PROPERTY 
LAWS 16 



CONCLUSION 19 



TABLE OF AUTHORITIES 



Cases 



Page 



Barnitz v. Beverly 17 

163 U.S. 118 

Brine v. Insurance Co. 3_, 8 

96 U.S. 627 

Clark Investment Company v. United States I3, li| ^ I9 

36^ F.2d 7, 10 

Clarke v. Clarke 8 

178 U.S. 186, 191 

Clearfield Trust Co. v. United States 9, 10 

318 U.S. 363. 367 

Custer V. McCutcheon 9 

283 U.S. 51^ 

Fink V. O'Neil 9 

106 U.S. 272 

Haynes v. Tredway 17 

133 Cal. 400 

Herlong-Sierra Homes, Inc. v. United States 15 

358 F.2d 300 

Johnson v. Razy 17 

181 Cal. 3^2 

Madison Properties^ Inc. v. United States 15 

357 F.2d jhO 

MaUj Sadler & Co. v. Kearney 17 

143 Cal. 506 

Parker v. Dacres 3^ 8 

130 U.S. 43 

Prussing v. Prussing 17 

35 Cal.App.2d 508 

Purser v. Cady 17 

120 Cal. 214 

United States v. Allegheny County 15 

322 U.S. 174 



Cases (cont'd) Page 

United States v. Flower Manor, Inc. I5 

344 F.2d 958 

United States v. Shimer 5, 9 10. 

367 U.S. 374 11, Ik 

United States v. Sylacauga Properties , Inc. I5 

323 F.2d ^87 

United States v. View Crest Garden Apts., Inc. 4. 5, 13, 

268 F.2d 380, 382, 383 l4 

United States v. Walker Park Realty, Inc. 15 

383 F.2d 732 

United States v. Yazell 6. 9, 12, 

382 U.S. 341, 348, 355, 357 14, 18 



Statutes 



California Code of Civil Procedure 

Section 703 17 

Section 744 17 

Code of Federal Regulations 

Title 24, section 58O.I8 (1947 Supp.) 6, 12 

Federal Rules of Civil Procedure 

Rule 69 8, 18 

United States Code 

Title 12, section 1707(a) 3 

Title 12, section 1713(g) (k) 5 

Title 12, section 1736 (a) 3 

Title 12, section 1742 6 

Title 12, section 1743(c) 3 

Title 28, section 2410(c) 15 

Other 

Black's Law Dictionary (4th ed. 1951) 5 



NO. 22708 

UNITED STATES COURT OF APPEALS 
FOR THE NINTH CIRCUIT 



UNITED STATES OF AMERICA^ 

Appellant, 

V. ) BRIEF 

OF THE STATE OF CALIFORNIA 

STADIUM APARTMENTS, INC. ) AS AMICUS CURIAE 
et al. , 

Appellees. 



INTRODUCTION AND STATEMENT OF THE ISSUE ON APPEAL 

The statement of the facts and statement of the 
ll case are contained, in the appellant's brief. The issue 

!l 

of this appeal is whether or not the district court erred 
I by including the Idaho period of redemption in the decree 
of foreclosure obtained by the United States in this 
action. 

The appellant argues that this Court should 
fashion or adopt a federal rule that a mortgagor's right 
of redemption under state law does not apply to a mortgage 
assigned to the United States under the National Housing 
Act. Although the source of law applicable to the rights 
and obligations of the United States is federal, we 



believe the rule propounded by appellant is contrary to 
law and contrary to sound policy. It will be argued 
herein that the inclusion of the Idaho redemption period 
in the foreclosure decree was proper for the following 
reasons: first s because Congress in enacting the National 
Housing Act adopted the mortgage and lien laws of the 
state in which real estate securing a loan is located; 
second _, because the adoption of a federal rule abrogating 
the right of redemption conflicts with the federal 
regulations under which the mortgage foreclosed in this 
action was insured and is not even authorized by the 
mortgage itself; third , because the adoption of a rule 
abrogating the right of redemption is contrary to existing 
federal case law; and finally , because the creation of 
such a rule is not necessary for the administration of 
FHA programs and would disrupt state property law. 

ARGUMENT 



I. THE PERIOD OF REDEMPTION PRESCRIBED BY 
IDAHO LAW APPLIES TO THE FORECLOSURE IN 
THIS ACTION, BECAUSE CONGRESS INCORPORATED 
STATE MORTGAGE LIEN LAWS INTO THE NATIONAL 
HOUSING ACT RATHER THAN CREATING A SPECIAL 
FEDERAL MORTGAGE OR FEDERAL LIEN LAW 



In facilitating the building of homes on federal 
credit. Congress could have created a federal mortgage and 
a federal lien law. It did not. Instead, it provided a 
system of insurance of mortgages existing under state laws, 



, 



The term mortgage is defined in the National Housing Act 
as follows: 

"The term 'mortgage' means a first mortgage 
on real estate^ . . .; and the term 'first mortgage' 
means such classes of first liens as are commonly- 
given to secure advances on^ or the unpaid pur- 
chase price of J real estate^ under the laws of 
the State in which the real estate is located , 
together with the credit instruments, if any, 
secured thereby." 12 U.S.C. §§ 1736(a), 1707(a). 
(Emphasis added.) 

This definition of mortgage is not a minor or incidental 
provision of the National Housing Act but is of crucial 
importance to the entire statutory scheme. By defining 
"mortgage" as first liens commonly given in the state in 
which real property is located. Congress expressly adopted 
state laws regarding such liens. 
1 Under this scheme, the mortgagee receives the 

I benefit of the insurance after default by assigning all 
its rights under the mortgage to the United States. 
12 U.S.C. § 17^3(c). The right of redemption is an 
important property right as recognized by federal as well 
as state courts. Parker v. Dacres, 130 U.S. ^3; Brine v. 
Insurance Co ., 96 U.S. 627. There is no indication in 
the National Housing Act that Congress intended to abolish 



this very important right when an insured mortgage was 
assigned to the United States. 

On page 19 of its brief ^ appellant concludes 
that the failure of Congress to provide for a redemption 
period in the National Housing Act is a forceful expression 
that none should exist. The congressional purpose was to 
adopt the laws as they exist in each state. Creation of 
a right of redemption in the National Housing Act would 
disrupt the laws in those states which do not have the 
right as much as abolition of the right would disrupt the 
laws of the states which do have it. 

In United States v. View Crest Garden Apts.j Inc ., 
268 F.2d 38O5 the argument that Congress adopted state law 
into the National Housing Act through the definition of 
"mortgage" was considered and criticized with reference to 
the showing necessary to .justify appointment of a receiver 
under a mortgage insured under Title 2 of the National 
Housing Act. The court stated: 

"The argument is that in adopting the state 
definition of 'first mortgage , ' Congress 
intended to adopt all the incidents of the 
mortgage relation under state law including 
remedies on default ajid the appointment of 
receivers. That this is not the case is 
clear from reading section 1713 of the same 



L 



Act whicn defines certain acts as being in 
default (part g) and sets out certain remedies 
that the FHA can pursue such as institution of 
foreclosure (part k) proceedings without 
reference to whether or not there is such a 
remedy for the default described in the State 
where the property is located." 268 F.2d at 
382. (Emphasis theirs.) 

It is difficult to see what provisions of 
section 1713^ parts (g) and (k), are inconsistent with 
state laws. However, under the doctrine of expressio 
unius est exclusio alterius ,— the expression of exceptions 
to state law in section 1713^ parts (g) sind (k), would 
exclude by implication all other exceptions to state law. 

Since the View Crest decision, the Supreme Court 
has indicated that state laws should not be replaced with 
reference to federally guaranteed loans unless displace- 
ment was intended by an act of Congress or by valid 

regulation authorized by an act of Congress ( United States 

2/ 

V. Shimer , 367 U.S. 37^)- and has also indicated that 

federal rules will not be adopted where local interests 



1. "Expression of one thing is the exclusion of 
another." Black's Law Dictionary (4th ed. 1951) at p. 692. 

2. Discussed page 10, infra. 



are important and uniformity is not ( United States v, 
Yazell, 382 U.S. 3^1).- 



II. THE ADOPTION OF A FEDERAL RULE 
ABROGATING THE STATE RIGHT OF 
REDEMPTION VIOLATES THE REGULATIONS 
UNDER WHICH THE MORTGAGE HEREIN WAS 
INSURED AND IS NOT EVEN AUTHORIZED 
BY THE MORTGAGE ITSELF 



Insurance of the mortgage foreclosed herein 
was governed by the regulations promulgated pursuant to 
section 17^2^, title 12 of the United States Code.- In 
apparent conformity with the congressional purpose to 
rely upon local laws relating to mortgage liens, the 
Housing Administrator promulgated the following regulation 

" Rights and remedies of mortgagee in 
event of default or foreclosure . The mortgage 
must contain a provision or provisions, satis- 
factory to the Commissioner, giving to the 
mortgagee, in the event of default or fore- 
closure of the mortgage, such rights and 
remedies for the protection and preservation 
of the property covered by the mortgage and 



3, Discussed page 12, infra . 

k. "The Secretary is authorized and directed to make 
such rules and regulations as may be necessary to carry 
out the provisions of this subchapter." 12 U.S.C. § 17^2. 



L 



the income therefrom^ as are available under 

the law or custom of the jurisdiction . " 

24 C.F.R. § 580.18 (19^7 Supp.)- (Second 
emphasis added.) 

This regulation clearly contemplates adoption of local 
law governing rights and remedies under insured mortgages, 
rather than adoption of uniform federal law. 

Lacking evidence of congressional or even 
administrative intent to abrogate the state right of 
redemption _, appellant relies on the following language 
of the mortgage itself. 

"'The Mortgagor J to the extent permitted by 
law, hereby waives the benefit of any and all 
homestead and exemption laws and of any right 

to a stay or redemption and the benefit of 

5/ 
any moratorium law or laws . ' "— 

Assuming, arguendo , that a PHA mortgage form could abolish 
the right of redemption without statutory or regulatory 
authority, this language does not purport to do so. The 
waiver is expressly conditioned by the phrase "to the 
extent permitted by law." Since the United States does 
not have homestead, exemption, and moratorium laws, the 



5. Appellant's Brief, p. ^ 



law referred to is state law. Therefore^ the mortgage 
itself incorporates state law. 

III. THE CREATION OF A RULE ABOLISHING 
THE RIGHT OF REDEMPTION UNDER 
STATE LAW CONFLICTS WITH EXISTING 
FEDERAL CASE LAW 

In Clarke v. Clarke , I78 U.S. I86, the Supreme 
Court stated: 

"it is a principle firmly established 
that to the law of the State in which the 
land is situated we must look for the rules 
which govern its descent, alienation and 
transfer, and for the effect and construction 
of wills and other conveyajices . " I78 U.S. 
at 191. 

Since mortgages are conveyances of land, their effect and 
construction are governed by the law of the state in 
which the land is located. The right of redemption under 
state law has long been recognized in federal law, because 
it is a property right. Parker v. Dacres , supra j Brine v. 
Insurance Company , supra . 

Even if the right of redemption were only a 
matter of post judgment procedure, it would be governed 
by state law. A foreclosure sale is essentially an 
execution upon the judgment foreclosing the mortgagor's 
equity of redemption. Rule 69 of the Federal Rules of 



« 



Civil Procedure expressly adopts state procedure on 
execution and thereby limits the United States' remedies 
on judgments to those provided by state law. United States 
^* Yo-zell j supra ^ at 355; Custer v. McCutcheon , 283 U.S. 
514 i Fink v. O'Neil , IO6 U.S. 272. 

Appellant's argument for adoption of a special 
federal rule abolishing the right of redemption on 
mortgages insured by the United States is based upon the 
assertion that such a rule is required to protect the 
integrity of "nationwide mortgage insurance programs."— 
Appellant relies on the Supreme Court cases of Clear - 
field Trust Co . V. United States , 318 U.S. 363^ and 
United States v. Shime r , supra , to support this contention. 

In Clearfield the court was determining the 
extent of the obligation of a guarantor of a forged endorse- 
ment on a check drawn by the United States. The court held 
that federal law controlled federal rights, that in absence 
of an act of Congress the federal courts would fashion such 
law, and that it would adopt an uniform federal rule based 
on the facts of the case before it. The factual basis of 
Clearfield which required an uniform rule is not present in 
this case. In adopting an uniform rule, the court stated: 

"But reasons which may make state law at times 



6. Appellant's Brief, pp. 8, 13 



the appropriate federal rule are singularly- 
inappropriate here. The issuance of commercial 
paper by the United States is on a vast scale 
and transactions in that paper from issuance 
to payment will commonly occur in several 
states. The application of state law^ even 
without the conflict of laws rules of the 
forum_, would subject the rights and duties of 
the United States to exceptional uncertainty." 
318 U.S. at 367. 

The foreclosure of a mortgage occurs in only one state, 
and the right of redemption is subject to the law of only 
one state. Clearfield is distinguishable from this case 
for the additional reasons that Congress has incorporated 
state law in the National Housing Act and that the federal 
courts have already recognized and adopted the right of 
redemption in the states where it exists. 

United States v. Shimer , supra , is the only 
Supreme Court case cited where state laws relating to 
mortgages were displaced by federal law. In this case 
the lower court applied the Pennsylvania Anti-Deficiency 
Act to bar a recovery by the United States after fore- 
closure of a federally guaranteed loan. The Supreme 
Court held that application of the state anti-deficiency 
legislation conflicted with the regulations prescribed 



n r\ 



by the Veterans Administration _, which regulations were 

validly authorized by section 504 of the Serviceman's 

8/ 
Readjustment Act.— Before reaching its conclusion, the 

Supreme Court carefully analyzed the applicable regulatory 
scheme which provided an "upset price device." The court 
concluded that this device was intended to and did provide 
the same protection as the Pennsylvania Anti-Deficiency 
Act. 

This careful analysis and explanation of the 
Serviceman's Readjustment Act and the regulations pre- 
scribed thereunder strongly implies that state laws should 
not be overridden unless their replacement was clearly 
intended. In this case appellant does not show any pro- 
visions, statutory or by regulation, which were intended 
to replace or furnish the protection of the Idaho right 
of redemption. The rationale of Shimer , therefore, indi- 
cates that the Idaho redemption rule should not be abrogated, 
Furthermore, the right of recovery in Shimer was based on 
an independent right of indemnity by the Veterans 
Administration. The right of redemption is not an 
independent obligation but is an inseparable part of the 
property law defining the rights of the parties to a 
mortgage. 



8. 58 Stat. 291, as amended by 59 Stat. 626. 



-J. 



A third Supreme Court case has an important 
bearing on appellant's contention that an uniform rule 
should be adopted. In United States v. Yazell ^ supra , 
the Supreme Court affirmed a summary judgment denying 
the United States recovery on a contract between the 
Small Business Association and a Texas woman who did 
not have capacity to contract under a Texas law of 
coverture. In holding that there was no federal interest 
requiring state law to be overridden , the court stated: 

"Although it is unnecessary to decide 
in the present case whether the Texas law 
of coverture should apply ex proprio vigore -- 
on the theory that the contract here was made 
pursuant and subject to this provision of 
state law -- or by 'adoption' as a federal 
principle _, it is clear that the state rule 
should govern. There is here no need for 
uniformity. There is no problem in complying 
with state law; in fact, SBA transactions in 
each State are specifically and in great 
detail adapted to state law." 382 U.S. at 357. 

Since FHA transactions are also tailored to state law^ 

9/ 
there is no need for uniformity.— The court in Yazell 

9. See 24 C.P.R. § 58O.I8 (19^7 Supp.). 



reasoned that family law was an important matter of local 
interest. The right of redemption is part of state 
property law, which is also important as a matter of 
local interest. 

Appellant also relies heavily upon two Ninth 
Circuit cases. View Crest , supra , and Clark Investment 
Company v. United States , 36^ F.2d 7, to support its 
contention. In View Crest the issue involved was the show- 
ing necessary to obtain a receiver pursuant to an express 
agreement contained in a FHA insured mortgage. Although 
the court adopted a federal rule inconsistent with state 
law, it expressly excluded the right of redemption from 
its conclusions, stating: 

"it is urged that to hold that federal 
law applies would result in great hardship 
to mortgagors who would thereby be deprived 
of all rights under state law such as the 
right of redemption. We do not think that 
such a conclusion necessarily follows. A court 
confronted with that question could determine 
it by weighing the federal interest against 
the particular local policy involved. If the 
considerations weighed by the court suggest an 
adoption of local law, such as the local rule 
on redemption , that could be done." 268 F.2d 
at 383. (Emphasis added.) 



Clark Investment J Inc . v. United States ^ supra . 
Involved the right to rents collected during the redemption 
period by a receiver appointed under an insured mortgage. 
The court relying on View Crest also adopted a federal rule 
contrary to state law. As in View Crest j the court specifi- 
cally recognized the state right of redemption, stating: 

"The purchaser at the sale gets a title that 
is subject to defeasance by redemption." 
364 F.2d at 10. 

We believe that the adoption of federal law in 
both View Crest and Clark Investment is inconsistent with 
the adoption of state law in the National Housing Act and 
is contrary to the rationale of both United States v. Shimer , 
supra , and United States v, Yazell , supra . However, we 
emphasize that both View Crest and Clark Investment recog- 
nize the right of redemption and refrain from including it 
in the fashioning of an uniform federal rule. Furthermore, 
both cases are distinguishable from the case at bar because, 
unlike the right of redemption, the right to appointment of 
a receiver can be considered as a separate agreement and 
not a matter of property law. _Cf. United States v. Shimer , 
supra , which holds the right to indemnity a separate 
agreement. 

The other authorities cited by appellant have 
little or no bearing on its contention that an uniform 



L 



federal rule abolishing state redemption rights should be 
adopted. United States v, Sylacauga Properties, Inc ., 
323 P. 2d ^87^ involved an appeal from an order of con- 
tinuance in a foreclosure action. The court said that 
state law did not apply but did not indicate what state 
law was involved. Herlong-Sierra Homes , Inc . v. 
United States , 358 F.2d 300, United States v. Flower 
Manor, Inc ., 3^^ P. 2d 958, and United States v. Walker 
Park Realty, Inc ., 383 F.2d 732, are per curiam decisions 
which involve deficiency judgments and which do not dis- 
cuss the federal issues involved. United States v. 
Allegheny County , 322 U.S. 17 ^\> involved state taxation 
of federal property and does not have any bearing on the 
need for uniformity of law in the administration of 
federal mortgage insurance programs. In Madison 
Properties, Inc . v. United States , 375 P. 2d 7^0, the 
court expressly assumed for its decision that the Washington 
right of redemption applied. 

Appellant's footnote conclusion on page 19 of 
its brief that the enactment of 28 U.S.C. § 2^10(c) limits 
by implication the right of redemption is unsound. That 
section grants the United States the right of redemption 
in all states. This in no way indicates a congressional 
intention to abolish the right of redemption of other 
persons. 



ip; 



IV. THE CREATION OP A FEDERAL RULE ABRO- 
GATING THE RIGHT OF REDEMPTION IS 
NOT NECESSARY TO PROTECT NATIONWIDE 
MORTGAGE INSURANCE PROGRAMS AND WOULD 
DISRUPT STATE PROPERTY LAWS 



An uniform rule regarding the right of redemption 
is neither necessary nor contemplated by the FHA statutes 
and regulations. FHA insured mortgages are made on forms 
apparently tailored for each state. — The obvious reason 
for such tailoring is to conform to local law. 

The adoption of state law has the advantage of pro- 
viding a well-defined set of rules in each state. Fashioning 
of new federal law raises conflicts and uncertainty and^ 
thus, undermines commercial reliance on well-defined property 
rules. In California, for instance, most real property 
loans are secured by deeds of trust. If the right of 
redemption is abrogated on federally insured mortgages to 
protect the Federal Treasury, then it follows that California 

regulation of the exercise of the power of sale in a deed 

11/ 
of trust should also be abrogated. — Federal courts would 

probably develop federal common law principles to protect 

borrowers from unreasonable forfeitures and strict foreclosure 



10. 2M C.F.R. § 580.18 (19^7 Supp.). 

11. California Civil Code section 292^ and Code of 
Civil Procedure section 692 require a minimum waiting period 
of three months and twenty days before a power of sale may 
be exercised after default. 



., /^ 



But in the meantime borrowers ^ lenders, title insurers, 
prospective purchasers, and Junior lienors would be in an 
intolerable state of uncertainty. 

The adoption of a federal rule abrogating the 
right of redemption would disrupt established real 
property law. In California a mortgage is merely a lien 
which must be foreclosed. Code Civ. Proc, § 744; 
Johnson v. Razy , l8l Cal. 342 j Trussing v. Prusslng , 
35 Cal.App.2d 508. A purchaser at a foreclosure sale 
obtains bare legal title subject to defeasance upon a 
condition subsequent eind does not receive a sheriff's 
deed until the period of redemption has expired. Code 
Civ, Proc, § 703. The mortgagor not only has a power 
to terminate the purchaser's estate but, also, has the 
right of possession. Mau, Sadler & Co . v. Kearney , 
l43 Cal. 506; Purser v. Cady , 120 Cal. 2l4. The right 
of redemption cannot be abrogated retrospectively even by 
statute. Barnitz v. Beverly , I63 U.S. II8; Haynes v. 
Tredway , 133 Cal. 400. Junior lienors also have a 
valuable right on their power to redeem. Code Civ. Proc . , 
§ 703. Adoption of a federal rule abrogating the right 
of redemption simply abolishes these valuable property 
rights. 

The abolition of the right of redemption for 
mortgages insured by the Federal Housing Administration 
does not necessarily creat uniformity. Redemption rights 



reflect a balancing of Interests between mortgagors and 
mortgagees. By removing the Important right of redemption, 
this balance is upset. States without redemption rights 
have other means to protect mortgagors, so the removal 
of the right of redemption rather than create uniformity- 
may, in fact, create a great disparity between the pro- 
tection afforded citizens of different states. 

Appellant's argument that the right of redemption 
should be abrogated because it impairs the federal fore- 
closure remedy is appropriately answered by the language 
of the Supreme Court in United States v. Yazell . supra ; 

"The desire of the Federal Government to 
collect on its loans is understandable. 
Perhaps even in the case of a disaster loan, 
the zeal of its representatives may be commended. 
But this serves merely to present the question -- 
not to answer it. Every creditor has the same 
interest in this respect; every creditor wants 
to collect." 382 U.S. at 3^8. 

"This Court held that Revised Statutes § 916, 
now Rule 69 of the Federal Rules of Civil 
Procedure, governed, and that the United States' 
remedies on Judgments were limited to those 
generally provided by state law." 382 U.S. 
at 355. 



The uncertainty created by the adoption of the 
rule propounded by appellant is demonstrated by comparing 
the position taken by the appellant in this case and its 
position in Clark Investment ^ Inc . v. United States , 
supra . In Clark Investment the Idaho period of redemption 
was included in the foreclosure decree and was recognized 
by this Court. Appellant rationalizes this by asserting 

that it consented to redemption in Clark Investment ^ 

12/ 
apparently as a matter of grace, — Thus^ the existence 

of the very important right of redemption would seem to 
depend on the consent and grace of the Federal Housing 
Administration agents and attorneys acting without statu- 
tory or regulatory control. 

CONCLUSION 



The inclusion of the Idaho period of redemption 
in the foreclosure decree should be affirmed,, because the 
National Housing Act and applicable regulations contemplate 
reference to state law. The decision of the district court 
should also be upheld on the ground that federal case law 
already recognizes the right of redemption as a property 
right incorporated into federal law. 

Finally^ if the Court considers the question as 
one of fashioning an applicable rule^ it should adopt the 



12. Appellant's Brief ^ p. l8 



state law of redemption , because the importajnce of reliance 
on settled property law and the preservation of valuable 
property rights far outweigh any need for uniformity. 

DATED: June 2.6, I969 

San Francisco_, California 

Respectfully submitted, 

THOMAS C. LYNCH 
Attorney General 

BURCH FITZPMaiCK 
Deputy Attorney General 

Attorneys for Amicus Curiae 



t ririnc\)\i-\ on 



CERTIFICATE OF COUNSEL 

I certify that, in connection with the preparation 
of this brief J I have examined Rules l8 and 19 of the 
United States Court of Appeals for the Ninth Circuity and 
that, in my opinion, the foregoing brief is in full com- 
pliance with those rules. 



BURCH FITZPATRISKjH 
Deputy Attorney General 



on 



r - 



I 



IN THE UNITED STATES COURT OF APPEALS 



FOR THE NINTH CIRCUIT 



NO. 22,708 






UNITED STATES OF AMERICA, 



Appellant, 



- V - 



STADIUM APARTMENTS, INC., ET AL. 



Appellee, 



ON APPEAL FROM THE UNITED STATES DISTRICT COURT 
FOR THE DISTRICT OF IDAHO 



BRIEF FOR AMICUS CURIAE - STATE OF ARIZONA 



JUN 23^69 



STATE OF ARIZONA 

Gary K. Nelson 

The Attorney General 

LEONARD M. BELL 
Assistant Attorney General 
159 Capitol Building 
Phoenix, Arizona 85007 

Attorneys for the 

STATE OF ARIZONA 



IN THE UNITED STATES COURT OF APPEALS 



FOR THE NINTH CIRCUIT 



NO. 22,708 



UNITED STATES OF AMERICA, 



Appellant, 



- V - 



STADIUM APARTMENTS, INC., ET AL. 



Appellee, 



ON APPEAL FROM THE UNITED STATES DISTRICT COURT 
FOR THE DISTRICT OF IDAHO 



BRIEF FOR AMICUS CURIAE - STATE OF ARIZONA 



STATE OF ARIZONA 

Gary K. Nelson 

The Attorney General 



LEONARD M. BELL 

Assistant Attorney General 



THE ST ATEM ENT OF POSITION OF 
THE STATE OF ARIZONA 



The State of Arizona files this amicus curiae 

brief pursuant to an invitation expressed in an Order of 

this Court dated May 8, 1959. 

For its argument and conclusion, the State of 

Arizona concurs in the position taken by the amici curiae 

brief filed by the States of Idaho and Washington and 

hereby adopts that brief as its own. 

Respectfully sbumitted, 

STATE OF ARIZONA 

GARY K. NELSON 

The Attorney General 



LEONARD M. BELL 
Assistant Attorney General 
159 Capitol Building 
Phoenix, Arizona 85007 



Attorneys for the 

State of Arizona 



JLJ 




- 1 - 



CERTIFICATE OF M7\ILING 

I hereby certify that I have on this 20th day 
of June, 1969, served the foregoing brief of Amicus Curiae 
upon the Appellant by placing two (2) true and correct 
copies of the same in the United States mail, postage pre- 
paid, addressed to: 



Mr. Clarence D. Suiter 
Assistant United States Attorney 
District of Idaho 
550 West Fort Street 
Boise, Idaho 

ATTORNEY FOR APPELLANT 




LEONARD M. BELL 
Assistant Attorney General 
STATE OF ARIZONA 



- 2 - 



IN THE UNITED STATES COURT OF APPEALS 



FOR THE NINTH CIRCUIT 



NO. 22,708 



^ jL ki^Li IwBj 



UNITED STATES OF AMERICA, 



- V - 



Appellant, 



STADIUM APARTMENTS, INC., ETAL. 



Appellee, 



ON APPEAL FROM THE UNITED STATES DISTRICT COURT 
FOR THE DISTRICT OF IDAHO 



ADDITIONAL AMICUS CURIAE BRIEF 
STATE OF ARIZONA 



STATE OF ARIZONA 

Gary K. Nelson 

The Attorney General 



LEONARD M. BELL 
Assistant Attorney General 
159 Capitol Building 
Phoenix, Arizona 85007 

Attorneys for the 
STATE OF ARIZONA 



JUL 1 9 1969 
WM. B. LUCK, CLERK 



IN THE UNITED STATES COURT OF APPEALS 
FOR THE NINTH CIRCUIT 



NO. 22,708 



UNITED STATES OF AMERICA, 

Appellant, 



- V - 



STADIUM APARTMENTS, INC., ET AL. 

Appellee, 



ON APPEAL FROM THE UNITED STATES DISTRICT COURT 
FOR THE DISTRICT OF IDAHO 



ADDITIONAL AMICUS CURIAE BRIEF 
STATE OF ARIZONA 



STATE OF ARIZONA 

Gary K. Nelson 

The Attorney General 



LEONARD M. BELL 

Assistant Attorney General 

Attorneys for the 
STATE OF ARIZONA 



TABLE OF CONTENTS 



Page 



THE STATEMENT OF POSITION OF 
THE STATE OF ARIZONA 



CONCLUSION 



- 1 



CASES AND AUrHORITIES CITED 



Cases 



Page 



Elson Development Co. v. 1 

Arizona Savings and Loan Association, 

99 Ariz. 217, 

407 P. 2d 930 (1965) 



Auth orities 
A.R.S. 

§ 12-1282 



- 11 - 



THE STATEME NT OF POSITION O F 
THE STATE OF ARIZO NA 

The State of Arizona files this additional amicus 
curiae brief pursuant to a letter from the Clerk of this Court 
dated June 26, 1969, allowing the filing of an additional brief 
on the merits until July 20, 1959. In this brief, the State of 
Arizona will not burden the Court with full legal argument on the 
merits, as the amicus curiae brief of the State of California 
has presented an exhaustive review of the law in this matter. 
Following is a short review of the Arizona statutory and case law 
providing for redemption following foreclosure of mortgages. 

The Arizona Revised Statutes, as amended in 1963, pro- 
vide in part: 

"§ 12-1282. Time for redemption 

"A. The judgment debtor or his successors in 
interest may redeem at any time within thirty 
days after the date of the sale if the court 
determined as part of the judgment under which 
the sale was made that the property was both 
abandoned and not used primarily for agricultur- 
al or grazing purposes. 

"B. The judgment debtor or his successor in 
interest may redeem at any time within six 
months after the date of the sale except when 
the court has made the determinations as pro- 
vided in subsection A. * * *" 

In Elson Development Co. v. Arizona Savings and Loan 

Association, 99 Ariz. 217, 407 P. 2d 930 (1965) the Arizona Supreme 



- 1 - 



Court held that an agreement by the mortgagor to abandon the 

mortgaged premises if the said mortgagor did not perform certain 

obligations by a set date to be invalid and against public policy. 

In that opinion, the Arizona Supreme Court stated: 

"In the instant case there was an effort to 
reduce the statutory redemption period by 
the agreement to abandon. Such agreements 
would mean that the redemption period would 
end at a time when the mortgagor might be 
least able to make redemption. The mortgagee 
could thereby secure title to the property by 
bidding less than the amount of the judgment, 
and less than the real value of the property, 
thereby defeating the purpose and intent of 
the provisions of the statutes providing for 
redemption periods. 

"The intent and purpose of the statute pro- 
viding for redemption cannot be violated by 
an agreement. The object of the redemption 
statute is to give to the mortgagor time to 
pay his obligation and avoid the loss of his 
property. ..." 



- 2 



CONCLUSION 
The inclusion of the Idaho period of redemption in the 
foreclosure decree should be affirmed as either a matter of law 
or as a matter of public policy if this Court is to adopt an 
applicable rule: 

(1) For the reasons expressed in the amicus curiae 
brief of the State of California, 

(2) For the reasons stated by the Arizona Supreme 
Court. 

(3) For the reason that periods of redemption after 
mortgage foreclosures do not impair the investment security of 
mortgagees. 

Respectfully submitted, 

STATE OF ARIZONA 

GARY K. NELSON 

The Attorney General 



LEONARD M. BELL 
Assistant Attorney General 
159 Capitol Building 
Phoenix, Arizona 85007 

Attorneys for the 
STATE OF ARIZONA 



- 3 - 



No 



22733 



IN THE 
UNITED STATES COURT OF APPEALS JjJM lli269 
FOR THE NINTH CIRCUIT 



SYDNEY N. FLOERSHEIM, an individual 
trading and doing business as 
^LCERSKEH^l SALES COMPANY ana NATIONA 
RESEARCH COMPANY, 




Petitioner. 



vs 



FEDERAL TRA'JE COx'MISSION, 



Respondent 



PETIITON FOR REHEARING BY PETl.J -,"^R 
AND REQUEST FOR HEARING EN c. :<:. 



JAMES A. SCHMIESING 

Attorney at Law 

833 Dover Drive 

Suite 6 

Newport Bead , California 

Attorney fcr Petitioner 



^^'V 1 ISSg 



^•'Al. 






n - 



TOPICAL INDEX 

Page 

STATEMENT OF CASE 1 

GROUNDS FOR REHEARING 1 

ARGUMENT 2 



THE DECISION INSOFAR AS IT HOLDS THAT THERE 
IS SUBSTANTIAL EVIDENCE TO SUPPORT THE ORDER 
OF THE FEDERAL TRADE COMMISSION, IS CONTRARY 
TO THE EVIDENCE 2 

II 
THE DECISION IS CONTRARY TO LAW IN HOLDING 
THAT : 5 

A. The Order of the Federal Trade Commission 
is not arbitrary, capricious, unreasonable, 
and a d enial of due process 5 

B. The Petitioner received adequate notice 
he was being charged with niisrepresenting 
that a third party, other than the creditor 
was interested in the debt 6 

III 

SUBSTANTIAL LEGAL ISSUES Ri\ISED BY PETITIONER 

WERE NOT CONSIDERED OR WERE OVERLOOKED BY 

THE COURT 6 

REQUEST FOR HEARING EN BANC 7 



TABLE OF AUTHORITIES CITED 

STATUTES Page 

62 Stat. 782, 18 U.S.C. 1718 3 

TEXTS 
U.S. Postal Regulation Manual 124.55 3 



No. 22733 
IN THE 
UNITED STATES COURT OF APPEALS 
FOR THE NINTH CIRCUIT 



SYDNEY N. FLOERSHEIM, an individual 
trading and doing business as 
FLOERSHEIM SALES COMPANY and NATIONAL 
RESEARCH COMPANY, 

Petitioner, 

vs 

FEDERAL TRADE COI^IMISSION, 

Respondent . 



PETITION FOR REHEARING BY PETITIONER AND 
REQUEST FOR HEARING EN BANC 



S TATEMENT OF CASE 
Petitioner has heretofore filed with the above 
entitled court a Petition to Review an Order of the 
Federal Trade Commission. The Order of the Federal Trade 
Commission was affirmed on May 28, 1969. 

GROL^^DS FOR REHEARING 
A rehearing should be granted herein and the decision 
vacated for the following three (3) reasons: 

I 
The decision, insofar as it holds that there is 
substantial evidence to support the Order of the Federal 

-1- 



Trade Commission, is contrary to the evidence. 

II 
The decision is contrary to law insofar as it 
holds that : 

A. The Order of the Federal Trade Commission 

is not arbitrary, capricious,, unreasonable and a denial 
of due process; and, 

B. The Petitioner received adequate notice he 

was being charged with misrepresenting that a third party, 
other than the creditor, was interested in the debt. 

Ill 

Substantial legal issues raised by the Petitioner 
were not considered or were overlooked by the Court. 

ARGUMENT 
I 

THE DECISION, INSOFAR AS IT HELD THAT THERE IS 
SUBSTANTIAL EVIDENCE TO SUPPORT THE ORDER OF THE FEDERAL 
TRADE COMMISSION, IS CONTRARY TO THE EVIDENCE. 

The decision, at pages 1-3, gives a physical 
description of the forms sold by the Petitioner. Then, 
commencing on Page 3, and continuing through Page 6, the 
decision summarizes or quotes from portions of the Opinion 
and Order of the Commission. The decision does not state, nor 
does it discuss, the testimony of witnesses at the hearing 
with respect to the effect of the forms upon persons re- 
ceiving them and whether they were deceived or misled as 
to the true identity of sender, or their purpose. Yet, 



the decision concludes, at page 6, that there is sub- 
stantial evidence to support the conclusion of the Commission 
that the Petitioner's forms and envelopes "are misleading 
create the impression that they come from the government 
or some other official source or third party, rather than 
from the creditor, and that they have the capacity to 
and tendency to deceive those to whom they are sent." 

Forms, or any other type of documents, cannot be 
deceptive in the abstract. Unless some person is deceived, 
the forms are not deceptive. The testimony at the hearing 
was that in reality and in actual use the form.s did not 
deceive . The finding of the Commission is thus erroneous 
in that there is no substantial evidence to support it. 

Further, subparagraph 3c of the Commission's Order 
requires Petitioner to have printed on any envelope which 
uses a Washington D.C. return address the identity of the 
creditor. U. S. Postal Regulation 124.55 provides in per- 
tinent part that any matter which has on its outside label 

or envelope " any language asking for payment of a 

bill which by its manner orstyle of display is defamatory 
and reflects injuriously on the character of the addressee," 
is libelous . 

62 Stat 782, 18 U.S.C. 1718 provides in substance 
that any such libelous material will not be delivered and 
that deposit for mailing of such material is a crime. 



-3- 



Thus, if Petitioner takes an assignment of an 
obligation for collection, being properly licensed to do 
so, thereby becoming the creditor, the printing of his 
trade name alone, i.e., "Payment Demand, Inc." on his 
envelopes might well be considered a violation of the 
above cited Statute and Postal Regulation. In such a 
case, compliance with subparagraph 3c of the Order of 
the Commission might well deprive him of the use of the 
United States Mail service and subject him to criminal pro- 
secution. 

The Commission's Order would also deny the use of 
the raail and impose possible criminal prosecution on a 
customer of Petitioner who happened to be in the collection 
business and had a trade name descriptive of his type of 
business, such as, e.g., "Overdue Accounts Receivable 
Collections". This is unreasonable, arbitrary, capricious 
and a denial of due process of law. It is such because never 
has it been held that a creditor, himself, could not make 
every reasonable and lawful effort to collect money due 
him. 

To place the Petitioner or his customers in a position 
where they are confronted with the alternatives of: 1) 
violating the Order of the Commission by omitting the name 
of the creditor; 2) violating the above cited Statute and 
Postal Regulation by using the name of the creditor and 



-4- 



facing the very real probability that the material will 

not be delivered and that they might be prosecuted criminally; 

or 3) not using the mail and thus being de facto put out 

of business, is certainly the rendering of an unreasonable, 

arbitrary and capricious order which deprives Petitioner 

and his customers of their property without due process 

of law. 

II 

THE DECISION IS CONTRARY TO LAW IN HOLDING THAT : 

A. THE ORDER OF THE FEDERAL TRADE COMMISSION IS 
NOT ARBITRARY, CAPRICIOUS, UNREASONABLE AND A DENIAL OF 
DUE PROCESS: 

As discussed above, the only possible evidence of 
some momentary deception, was testimony by witnesses which 
related only to the type of envelope used by the Petitioner. 
On the other hand, the Order of the Commission went far 
beyond dealing with the type of envelope used and thus 
goes far beyond, as the Court stated in its opinion, at 

page 6, imposing a "remedy reasonably calculated to 

end the deception." The Court imiplicitly recognized that 
the Order, at least to sorr.e degree was broader than necessary 
when it stated that the "fact that it may impose more 
control than essential is not fatal." 

However, there is a line beyond which "more control 
than is essential" is no longer permissible, but is un- 
reasonable, arbitrary and capricious. It is in light of 
the evidence as stated above, that Petitioner contends that 



-5- 



the Order has crossed that line and _is unreasonable, 
arbitrary and capricious. 

B. THE PETITIONER RECEIVED ADEQUATE NOTICE HE 
WAS BEING CHARGED WITH MISREPRESENTING THAI A THIRD 
PARTY, OTHER THAN THE CREDITOR, WAS INTERESTED IN THE DEBT. 

The Court, in its opinion, stated at page 6, that 
"we have reviewed the complaint and the hearing and conclude 
that Petitioner had adequate notice of this charge". While 
it is true that the complaint could be interpreted to pro- 
vide sufficient notice, the Court has ignored the fact 
that Petitioner was told expressly, by the Hearing Officer, 
that unless the Commission amended the complaint to state 
clearly a charge relating to alleged misrepresentations 
that a third party, other than the creditor, was interested 
in the debt, this charge would not be considered. (See 
Reporter's Transcript, page 36, lines 1-12). Petitioner 
was thus affirmatively led to believe that this charge 
was not in issue, yet, a great portion of the Commission's 
Order deals directly with the point. (See paragraph 1, 2a, 
2c and 3b of the Decision) . Unless Petitioner is given 
notice that he must defend against a charge, the portions 
of an Order sustaining that charge are void. 

Ill 

SUBSTANTIAL LEGAL ISSUES RAISED BY PETITIONER WERE 
NOT CONSIDERED OR WERE OVERLOOKED BY THE COURT. 

Petitioner adopts by reference all of his arguments 

under Points I and II in support of his contention that 



-6- 



substantial legal issues raised by Petitioner were not 
considered or were overlooked by the Court, 
REQUEST FOR HEARING EN BANC 
Because of the importance of the decision to be 
reached in this case and the far reaching effect of the 
Commission's Order, it is respectively requested and 
suggested that this case be heard en banc . 

DATED: This 8th day of June, 1969.' 

Respectfully submitted, 

JAMES A. SCHMIESING, 

Attorney for Petitioner 



CERTIFICATE OF COUNSEL 



JAMES A. SCHMIESING, counsel for Petitioner, does 
hereby certify that in his judgment the Petition for 
Rehearing is well founded and is not interposed for delay. 

JAMES A. SCHMIESING, 

Attorney for Petitioner 



-7- 



AFFIDAVIT OF MAILING 



STATE OF CALIFORNIA ) 

N g g 

COUNTY OF ORANGE ) 

I, the undersigned, say: 

I am a citizen of the United States and a resident 

of the county aforesaid; I am over the age of eighteen 

years and not a party to the within entitled action; my 

business address is 833 Dover Drive - Suite 6, Newport 

Beach, California, 92660. On June 9, 1969, I served 

the within PETITION FOR REHEARING BY PETITIONER AND 

REQUEST FOR HEARING EN BANC, on the following in said 

action, by placing a true copy thereof enclosed in a 

sealed envelope with postage thereon fully prepaid, in 

the United States mail at Newport Beach, California, 

addressed as follows : 

WILLIAM B. LUCK, Clerk 

United States Court of Appeals - Ninth Circuit 

7th and Mission Streets 

P.O. Box 547 

San Francisco, California 94101 (25 copies) 

JAMES McI. HENDERSON, General Counsel 
J. B. TRULY, Assistant General Counsel 
ALVIN L. BERMAN, Attorney 
FEDERAL TRADE COMMISSION 
Washington, D.C. 20580 (3 copies) 

DATE: This 9th day of June, 1969. 



Claudia D. King 
Subscribed and sworn to before me 
on this 9th day of June, 1969. 



c. 




.,■ I 



/ 



? J 



Noi.ary Public in and for said ,■ 
County and State -^ 



3AMES A. SCHMIESINC 




'* S ^^ UU\Af UkJ*A^ 



OF?iCJAL SEAL 

JAMES A. SCHMIESING 

NOTARY PU3LIC - CMlFOivNIA 

PRINCIPAL OFFICE IN 

ORANGE COUNTY 



My CoiTimissioa Expires July 25, 1971 




UNITED STATES COURT OF APPEALS 
FOR THE NINTH CIRCUIT 



.ju lViS69 



LAWRENCE E. WILSON, Warden, 

Appellant, 
vs. 

VERON ATCHLEY, 

Appellee. 




No. 22735 



APPELLANT'S PETITION FOR REHEARING AND 
SUGGESTION FOR REHEARING EN BANC. 



THOMAS C. LYNCH, Attorney General 
of the State of California 

JOHN T. MURPHY 

Deputy Attorney General 

WILLIAM D. STEIN 

Deputy Attorney General 

6000 State Building 

San Francisco, California 9^102 

Telephone: 557-28^17 

Attorneys for Appellant. 



FILED 



ARGUMENT 



CONCLUSION 
APPENDIX A 



TOPICAL INDEX 



Page 



I. THE DISTRICT COURT ERRONEOUSLY CONCLUDED 
THAT PETITIONER HAD REBUTTED THE PRE- 
SUMED VALIDITY OF THE CALIFORNIA SUPREME 
COURT'S OPINION THAT HIS STATEMENT WAS 
ADMISSIBLE AT TRIAL. 



STATUTES AND AUTHORITIES 



Federal Rules of Appellate Procedure 
Rules 35, ^0 

Rules of the United States Court of Appeals 
for the Ninth Circuit 
Rule 10 

28 United States Code 
§ 225^* 



1 
2, 3 



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UNITED STATES COURT OP APPEALS 
FOR THE NINTH CIRCUIT 



LAWRENCE E. WILSON, Warden, 

Appellant, 
vs. 

VERON ATCHLEY, 

Appellee. 



No. 22735 



APPELLANT'S PETITION FOR REHEARING AND 
SUGGESTION FOR REHEARING EN BANC. 



To the Honorable STANLEY N. BARNES, FREDERICK G. HAMLEY, 
and JAMES R. BROWNING, Circuit Judges: 

COMES NOW, APPELLANT, LAWRENCE E. WILSON, of the 
Department of Corrections of the State of California, and 
pursuant to Rules 35 and 40 of the Federal Rules of Appel- 
late Procedure and Rule 10 of the Rules of the United States 
Court of Appeals for the Ninth Circuit, respectfully request 
a rehearing of this court's decision of May 27, 1969, in 
the above-entitled proceedings which was a review of an 
order of the United States District Court for the Northern 
District of California, granting a state prisoner's petition 
for a writ of habeas corpus. As grounds for rehearing, 
appellee respectfully represents: 

1. The district court erroneously concluded that 
petitioner had rebutted the presumed validity of the 



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California Supreme Court's opinion that his statement was 

admissible at trial. 

I 

THE DISTRICT COURT ERRONEOUSLY CONCLUDED 
THAT PETITIONER HAD REBUTTED THE PRESUMED 
VALIDITY OF THE CALIFORNIA SUPREME 
COURT'S OPINION THAT HIS STATEMENT 
WAS ADMISSIBLE' AT TRIAL. 

According to Title 28 U.S. C. section 225^4, the 
burden rested upon petitioner in the district court to 
establish by convincing evidence that the factual deter- 
mination made by the California courts was erroneous. The 
district court's order granting the writ, and this court's 
per curiam opinion affirming that order, fail to state 
upon what facts it can be concluded that petitioner has 
successfully rebutted this presumption of validity. See 
the dissenting opinion of Justin Barnes attached hereto 
as Appendix "A". 

In view of the extreme importance the application 
of 28 U.S.C. section 2254 has to the administration of 
federal habeas corpus relief, we respectfully request that 
this rehearing be held en banc. 



2. 



*im 



\y k. V 



'P ■ n - 



CONCLUSION 

Appellant respectfully requests this rehearing 
and suggests that the rehearing be held en banc in view of 
the district court's opinion that the California Supreme 
Court's decision in this case is not entitled to the pre- 
sumption of validity contained in 28 U.S.C. section 225^. 

Dated: June 10, 1969 

THOMAS C. LYNCH, Attorney General 
of the State of California 

JOHN T. MURPHY 

Deputy Attorney General 



WDS:ml 

2** SF CR 
67-360 



WILLIAM D. STEIN 

Deputy Attorney General 



Attorneys for Appellant 



APPENDIX A 



UNITED STATES COURT OF APPEALS 
FOR THE NINTH CIRCUIT 



Lawrence E. Wilson, Warden, 

Appellant, 
vs. 

Veron Atchley, 

Appellee. 



>. No. 22,735 



[May 27, 1969] 

Appeal from tlic United States District Court 
for the Northern District of California 



Before: BARNES, HAMLEY, and BROWNING. 
Circuit Judges 

PER CURIAM: 

The judgment is affirmed for the reasons stated in the district 
court's opinion, F.Supp (N.D. Calif. 1968). 



BARNES, Circuit Judge, dissenting: 

Appellant was a petitioning state prisoner in the court below. 
He had been convicted of first degree murder and sentenced to 
death. The California Supreme Court affirmed the conviction 
and sentence. (53 Cal.2d 160, 346 P.2d 764 (1959).) Certiorari 
to the Supreme Court of the United States was granted, and 
then dismissed as improvidently granted. (366 U.S. 207 (1961).) 
Appellant's sentence was later commuted to life imprisonment 
without possibility of parole in 1961, and was further commuted 
to allow parole in 1966. Appellant petitioned the United States 
courts for a writ of habeas corpus. This was denied, without a 
hearing, and the denial affirmed upon the ground there was no 
lack of due process. Atchley v. Dickson, 338 P.2d 1014 (9th 
Cir. 1964). 



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2 Lawrence E. Wilson, Warden, vs. 

This is an appeal, therefore, from a second petition for a writ 
of habeas corpus based on the claim (1) petitioner's confession 
was improperly admitted into evidence; (2) the trial court 
erroneously excluded evidence as to petitioner's mental condition; 
(3) that no hearing was held outside the jury's presence to 
determine the admissibility of petitioner's extra-judicial statement. 

The Supreme Court of Califoniia specifically recognized the 
general rule of the inadmissibility of confessions, or any state- 
ment made by the accused relative to the offense charged, if 
made involuntarily. It passed upon the admission of appellant's 
"implicating statement" by stating: 

"The People contend, however, that the voluntary nature 
of defendant's statements was ade(}uatch' shown before the 
recording was admitted into evidence. Travers testified that 
no threats were made, that no inducements were offered, 
and that in an earlier conversation defendant had volun- 
teered substantially the same statements without being asked. 
Defendant at no time contradicted this testimony or sug- 
gested that any of his recorded statements were untrue. 
Moreover, the recorded conversation demonstrates that 
Travers referred to the insurance policy to explain why he 
was asking questions and not as an inducement for any 
particular answers. The trial court listened to the tape in 
chambers before ruling on its admissibility. There is there- 
fore no merit in defendant's contention that the recording 
was admitted without a proper showing that his statements 
were made voluntarily. 

"Defendant also contends that the recording was obtained 
by such fraud that its use as evidence was inconsistent with 
due process. He relies primarily on Leyra v. Denno, 347 
U.S. 556 [74 S.Ct. 71G, 98 L.Ed 948]. In that case the 
police, having promised a suspect medical treatment for an 
acutely painful attack of sinus, introduced as the 'doctor' 
a highly skilled psychiatrist with a considerable knowledge 
of hypnosis. The psychiatrist used threats, promises of 
leniency, and expressions of sympathy to reduce the physically 
exhausted suspect to almost trance-like submission. Use of 
his resulting confessions violated due process, largely because 
they were the product of 'mental coercion.' [footnote 
omitted] Although there was a similar deception in the 



.i9'»'^ 



■ it 



Veron Atchletj 3 

present case, there was no comparable mental coercion. The 
deception itself does not render defendant's statements inad- 
missible, for it^was not a type reasonably likely to procure 
an untrue statement. (People v. Connelly, 195 Cal. 584, 597, 
[234 P. 374] ; People v. CasteUo, 194 Cal. 595, 602 [229 p! 
855].)" 52 Cal.2d 160 at 170-171. 

Thus we see there was an in-chambcrs hearing of the tape 
recording, outside the presence of the jury, prior to any ruling 
by the state trial judge on admissibility. 

Likewise, the California Supreme Court had before it, and 
considered, the second error listed above — the exclusion of medi- 
cal testimony as to defendant's mental condition at the time 
of the shooting. The court concluded this was not error because 
never offered or raised below. Id., p. 176, Key ^ 20. The harm- 
less error found by the Supreme Court of California in the ex- 
clusion of certain expert opinion testimony was w^ith respect 
to defendant's reflexes and memory, not to the accuser's mental 
condition at the time of the shooting. 

T.he California Supreme Court also found there was "sub- 
stantial and uncontradicted evidence that no coercion occurred." 
Id., p. 171. 

I turn to 28 U.S.C. § 2254. Keeping in mind the findings of 
the California Supreme Court, I must ask, was this "a deter- 
mination after a hearing on the merits of a factual issue"? I 
think it was. It was "made by a state court of competent juris- 
diction.'* This was "in a proceeding in which [this] applicant 
for the v^rit and the state or an officer or agencj'^ thereof were 
parties." It was made in a "written opinion." It must therefore 
"be presumed to be correct" unless the applicant can bring him- 
self within any one of the exclusions of 28 U.S.C. § 2254, num- 
bered 1 to 8. 

In considering these exclusions (there being no admissions by 
the respondent state) the burden is on the applicant to establish 
the exception. 

With this in mind I turn to the district court findings in this 
case. It first determined that it was presently unable "to say 
that the confession was involuntary." (C.T. 73.) If the court 
was unable to do so, then, if I read § 2254 correctly, the ap- 
plicant has not met the burden of proof required by that section. 



i; 



■' ■ I 



''1 



4 Lawrence E. WiUon, Warden, vs. 

The district court said that tlic state trial court did not "re- 
liably" determine whether Atchley's confession was voluntary or 
involuntary, following the language of Jackson v. Denno, 378 
U.S. 368, 391 (1964). As pointed out above, the Supreme Court 
of California referred to the "proper showing" made in the trial 
court "that his statements were made voluntarily." 

It seems improper to me for a federal court,, ten years after 
the event, after examining a record from which it cannot con- 
clude the confession was involuntary, and without pointing out 
(except for general and conclusionary language) any evidence of 
convincing force that the confession was an involuntary act — ^to 
require an evidentiary hearing in the state courts. 

Without any recital of a factual showing by the petitioner 
that he falls within the § 2254 exceptions, the purpose of the 
"showing :^oquircd to offset the presumption created by the 
statute," is meaningless. 

The legislative history of 28 U.S.C. § 2254 shows that it was 
passed "to prevent the abuse of the writ of habeas corpus" 
by stivte prisoners in federal courts. 

"yuch purposes are to be attained by provisions for a quali- 
fie»i application of the doctrine of res adjudicata in Federal 
Court habeas corpus proceedings brought by State prisoners 
by provisions according a presumption of correctness to 
facti'.al determinations made at a hearing on the merits by 
State courts and by provisions with respect to the burden 
of proof in Federal court proceedings for habeas corpus by 
State prisoners." 1966 U. S. Cong. & Adm. News, p. 3663 at 
3666. 

The statute adopted by the Congress in 1966 says it places 
"the burden on him [petitioner] to establish by convincing evi- 
dence that the factual determination bj' the State court was 
erroneous." Id., p. 3667. 

I do not think that here it can fairly be stated that such "con- 
vincing evidence," existed, and 1 would reverse the district court's 
decision, and deny the petition, in an atten^pt to follow con- 
gressional dictates. lO-^^^ 1 ^^''^\ 



-.o-'^- 



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PERN.iU-WALSH PRIKTING CO., SAN FRANCISCO, • iS'^T-eS-MOS S 



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/ 



No. 22802 
IN THE 

United States Court of Appeals 

FOR THE NINTH CIRCUIT 



The Sixty Trust, 

Appellant, 
vs. 

Wm. B. Enright, Trustee, etc.. 

Appellee. 



OPENING BRIEF FOR APPELLANT. 



FILED 



Dean C. DuNLAVEY, . 9 (5 )^6B 

Charles R. Collins, -^ ~ 

Marsha K. McLean, -^ OtER^^ 

Gibson, Dunn & Crutcher, J\!^A. ^- ^ ^ 

634 South Spring Street, 
Los Angeles, Calif. 90014, 

Attorneys for Appellant. 



Parker & Son, Inc., Law Printers, Los Angeles. Phone MA. 6-9171. 




TOPICAL INDEX 

Page 

List of Abbreviations Preface 

Statement of Jurisdiction 1 

Statement of the Case 4 

Questions for Decision by This Court 6 

Specification of Errors ReHed Upon 7 

Summary of Argument 8 

The District Court Erred in Approving, Adopt- 
ing and Confirming the Report of the Referee 
to the Effect That the Transfer of the Sor- 
rento Property on the Eve of Fihng the Peti- 
tion Did Not Result in a Fraud Upon Any 
Creditor 9 

Conclusion 15 



TABLE OF AUTHORITIES CITED 

Cases Page 

Cosgrave, In re, 10 F. Supp. 672 14 

Milwaukee Postal Building Corp. v. McCann, 95 F. 

2d 948 11, 12 

Mongiello Bros. Coal Corp. v. Houghtaling Prop- 
erties Inc., 309 F. 2d 925 14 

North Kenniore Building Corp., \n re, 81 F. 2d 656 
13 

Shapiro v. Wilgus, 287 U.S. 348 13, 14 

Sherman v. Collins, 75 F. 2d 62 14 

Rules 

Federal Rules of Civil Procedure, Rule 73(d) 3 

Statutes 

United States Code, Title 11, Sec. 46 1 

United States Code, Title 11, Sec. 47 4 

United States Code, Title 11, Sec. 48 4 

United States Code, Title 11, Sees. 501-676 1, 4 

United States Code, Title 11, Sec. 502 1 

United States Code, Title 11, Sec. 511 1 

United States Code, Title 11, Sec. 521 4 

United States Code, Title 11, Sec. 528 1 

United States Code, Title 11, Sec. 537 2, 6 

United States Code, Title 11, Sec. 544 2 

United States Code, Title 11, Sec. 546 2 

United States Code, Title 11, Sec. 548 6 



List of Abbreviations. 

P. Petition 

A. Answer to Petition for Reorganization 

R. Transcript of Record 

AR. Additional Transcript of Record 

V. I Volume I of Transcript of Proceedings held on 
June 28, 1967 

V. II Volume II of Transcript of Proceedings held 
on June 30, 1967 

V. Ill Volume III of Transcript of Proceedings held 
on June 30, 1967 

Tr. Transcript of Proceedings held on September 

21, 1967 

Ex. Exhibits to hearing held on June 28, 1967 and 

June 30, 1967 



No. 22802 
IN THE 



United States Court of Appeals 

FOR THE NINTH CIRCUIT 



The Sixty Trust, 

vs. 
Wm. B. Enright, Trustee, etc., 



Appellant, 



Appellee. 



OPENING BRIEF FOR APPELLANT. 



Statement of Jurisdiction. 

The jurisdiction of the District Court was predicated 
upon Title 11 U.S.C. §§ 46, 502, 511 and 528, the action 
being one for corporate reorganization pursuant to the 
provisions of Chapter X of the Bankruptcy Act (Title 
11 U.S.C. §§501-676). 

University City, a California corporation [P. 1; R. 
2], filed a Petition [R. 2] on April 25, 1967, seeking 
corporate reorganization, alleging that for six months 
prior to the filing of the Petition, it had maintained 
its principal place of business within the territorial 
jurisdiction of the Southern District Court [P. 1 ; R. 
2] ; that its business was the operation and develop- 
ment of real estate [P. 1 ; R. 2] ; that its principal as- 
sets consisted of land [P. 2; R. 3]; that its principal 
liabilities consisted of various promissory notes secured 
by deeds of trust on said real property [P. 2; R. 3] ; 



— 2— 

that it was unable to meet its debts as they mature 
[P. 3; ]\. 4| ; tliat the value of its assets exceeded its 
total liabilities [P. 2; R. 3J; and that relief could not 
be obtained under Chapter XI of the Bankruptcy Act 
because no reorganization could be achieved without a 
reduction, extension or other satisfactory adjustment 
of at least some of its secured indebtedness [P. 4; R. 3]. 

After the District Court issued its initial Order A])- 
proving Petition, and Appointing Trustee, Order of 
Reference and Restraining Order [R. 23-28] and an 
Amendment thereto [R. 29J, The Sixty Trust, a se- 
cured creditor of University City [A. 1-2; R. 37-38]. 
filed its Answer to Petition for Reorganization [R. 37] 
pursuant to Section 137 of the Bankruptcy Act (Title 
11 U.S.C. § 537), seeking a dismissal of the Petition 
as not having been filed in good faith (Title 11 U.S.C. 
§ 546) on the ground, among others, that real property 
owned individually by certain shareholders, officers and 
directors of University City and encumbered by deeds of 
trust in favor of The Sixty Trust had been transferred 
to University City immediately prior to the filing of the 
Petition for the sole purpose of bringing said property 
within the injunctive power of the District Court so as 
to hinder, delay and prevent The Sixty Trust from 
proceeding with a foreclosure sale set for April 25. 
1967, the date upon which University City filed its 
Petition [A. 4-5; R. 40-41]. 

After a two-day hearing on the issues raised by said 
Answer before the Referee in Bankruptcy pursuant to 
Section 144 of the Bankruptcy Act (Title 11 U.S.C. 
§ 544) and the lodging of the Proposed Report, the 
Proposed Findings of Fact and Proposed Conclusions 
of Law by the Referee [R. 57-61] and the filing of 



— 3— 

Objections thereto by The Sixty Trust [R. 62-75], the 
Referee, on August 16, 1967, filed the Report of Referee 
and Special Master [R. 76-77], Findings of Fact 
and Conclusions of Law of Referee and Special Master 
[R. 78-81] concluding, among other things, that the 
last-minute transfer of the real property to University 
City by its shareholders, officers and directors had not 
been fraudulent as to any creditor [R. 77], that the 
Petition had been filed in good faith and should be ap- 
proved [R. 80], and that the request for a dismissal by 
The Sixty Trust should be denied [R. 80-81]. There- 
after, The Sixty Trust filed its Objections to Report of 
Special Master, Findings of Fact and Conclusions of 
Law Upon Contested Petition Under Chapter X [R. 
84-96], and oral argument on the said Report, Findings 
and Conclusions and Objections thereto subsequently 
was presented to the District Court. Following the 
filing by The Sixty Trust of Supplementary Objections 
to Report of Special Master, Findings of Fact and Con- 
clusions of Law Upon Contested Petition Under Chap- 
ter X on September 27, 1967 [R. 97-100], the District 
Court, on October 3, 1967, issued its Order Confirming 
Referee and Special Master's Report, Findings and Con- 
clusions of Law and Approving Petition Pursuant to 
Section 144 [R. 102]. Thereafter, following execution 
by the parties of a Stipulation Re Order to the effect 
that the Order Confirming Referee and Special Master's 
Report, Findings, and Conclusions of Law and Approv- 
ing Petition Pursuant to Section 144 involved more 
than $500.00 and the approval of same by the District 
Court on October 27, 1967 [R. 105-106], The Sixty 
Trust, on October 26, 1967, duly filed a Notice of 
Appeal to the Court of Appeal Under Fed. Rules of 
Civ. Proc. Rule 73(d) from said Order [R. 107-108]. 



— 4— 

The jurisdiction of this Court on appeal to review 
the Order of the District Court is premised upon Title 
11 U.S.C. §§47, 48 and 521. 

Statement of the Case. 

This is an appeal by the Trustees of The Sixty Trust 
(hereinafter "The Sixty Trust"), a secured creditor of 
University City [R. 35-36, 37-40] from the Order of 
the District Court [R. 102] approving the Petition for 
corporate reorganization under Chapter X of the Bank- 
ruptcy Act (Title 11 U.S.C. §§ 501-676) filed by Uni- 
versity City, a California corporation, the debtor herein 
[P. 1;R.2]. 

The filing of the said Petition represented the latest 
step (to that time) in a long history of actions taken 
by University City to stave off its creditors, secured and 
unsecured, in an attempt to avoid the inevitable con- 
sequences of its financial impotency. Its precarious fi- 
nancial condition, as demonstrated by the financial state- 
ment attached as Exhibit "A" to the Petition [R. 7-21] 
is not of recent origin. In fact, the pattern of Univer- 
sity City since its incorporation in 1959 has been one of 
a continual, pressing, seemingly insatiable, need for 
operating funds leading to frequent financings. Uni- 
versity City, on three separate occasions during the 
period 1962 through 1964, obtained three loans from 
The Sixty Trust alone in the total aggregate amount 
of $10,750,000.00 [V. I, 44:26-45:5; V. I, 52:6-12 and 
V. I, 59:11-18] secured by deeds of trust upon sub- 
stantially all of the real property owned by University 
City. At the time of the filing of the Petition, Univer- 
sity City remained indebted to The Sixty Trust in an 
amount in excess of $10,390,000.00 [A. 3; R. 39] 



— 5— 

and ninety-nine percent of University City's principal, 
if not sole, asset — land held for development and sale 
— was encumbered by deeds of trust in favor of The 
Sixty Trust [A. 3;R. 39]. 

University City has been in continual default to The 
Sixty Trust under its promissory notes and the deeds 
of trust securing the same since June 18, 1965; Notices 
of Default were filed by The Sixty Trust in January, 
1966 [Exs. L and M]. In addition, University City 
was in default under promissory notes and deeds of 
trust originally executed in favor of Pacific Finance 
Corporation and assigned by the latter for valuable con- 
sideration to The Sixty Trust [A. 2; R. 38]. A Trus- 
tee's foreclosure sale under one of said deeds of trust 
was scheduled for April 25, 1967 [A. 2; R. 38], the 
date of the filing of the Petition, but was stayed and 
restrained by Order of the District Court [R. 27-28]. 

In addition, deeds of trust were held by The Sixty 
Trust encumbering approximately 900 acres of real 
property (hereinafter the Sorrento Property) owned by 
Carlos Tavares and Irvin J. Kahn [Ex. J], officers, 
shareholders and directors of University City [V. I, 
19:16; V. I, 43:25-44:7]. The notes they secured 
were in default and Notices of Default and Election to 
Sell had been duly filed. Five days prior to the filing 
of the Petition for Reorganization by University City 
on April 25, 1967, Carlos Tavares and Irvin J. Kahn, 
by grant deeds dated April 20, 1967, transferred the 
Sorrento Property to University City [Ex. K]. At the 
time of the filing of the Petition herein, University 
City held the Sorrento Property as an asset [R. 21]. 
By virtue of the automatic stay order, The Sixty 



Trust was enjoined from foreclosing its deeds of trust 
encumbering the Sorrento l^roi)erty [R. 27-28; Title 
11 U.S.C. § 548J. 

Subsequent to the filing of the Petition, The Sixty 
Trust, pursuant to Section 137 of the Bankruptcy Act 
(Title 11 U.S.C. § 537), filed an Answer to the Peti- 
tion seeking a dismissal of the action asserting, among 
other grounds, that the transfer of the Sorrento Prop- 
erty by Kahn and Tavares to University City on the eve 
of filing the Petition, for the admitted sole purpose of 
bringing said Sorrento Property within the injunctive 
power of the Court so as to restrain, hinder, delay and 
prevent The Sixty Trust from proceeding with a fore- 
closure sale under a certain deed of trust encumbering 
said Sorrento Property, demonstrated that the Petition 
had not been filed in good faith [A. 4-5 ; R. 40-41 ] . 

After a hearing before the Referee and Special Mas- 
ter on the issues raised by said Answer, the Referee 
issued a Report [R. 76-77], made Findings of Fact and 
Conclusions of Law [R. 78-81], which included hold- 
ings to the effect that the Petition had been filed in 
good faith [R. 80] and that the transfer of the Sor- 
rento Property to the debtor did not result in a fraud 
upon any creditor [R. 17\, and which were confirmed, 
approved and adopted by the District Court by its order 
entered October 3, 1967 [R. 102]. 

Questions for Decision by This Court. 

The sole issues before this Court are whether two in- 
dividuals may segregate a portion of their individ- 
ually owned property, transfer that property to a con- 
trolled corporation, and then cause that corporation to 
file a Reorganization Petition so as to bring said prop- 



— 7— 

erty within the automatic injunctive power of the Dis- 
trict Court and thus protect their individual equity in 
said property from foreclosure by the holder of deeds 
of trust encumbering said property; whether such a 
transfer on the eve of filing of the Reorganization Pe- 
tition shows such a total absence of good faith as to 
taint the entire proceeding requiring a dismissal of the 
Petition; and whether such a transfer shows a suffi- 
cient lack of good faith to require, at the very mini- 
mum, the exclusion of the transferred property from 
the reorganization proceeding and the vacating of the 
restraining order relative to said property. 

Specification of Errors Relied Upon. 

1. The District Court erred in confirming and ap- 
proving the Referee and Special Master's Report. 

2. The District Court erred in approving the Re- 
port of the Referee to the effect that the transfer by 
certain shareholders of University City of the 900 acres 
of Sorrento Property to the debtor on the eve of filing 
the Petition was not a fraud on any creditor. 

3. The District Court erred in adopting the Find- 
ings of Fact and Conclusions of Law of the Referee 
and Special Master's Report. 

4. The District Court erred in adopting the finding 
of the Referee to the effect that the debtor's Petition 
was filed in good faith as required by Section 144 of 
the Bankruptcy Act. 

5. The District Court erred in adopting the con- 
clusion of law of the Referee to the effect that the 
debtor's Petition satisfactorily complies with the re- 
quirements of Chapter X of the Bankruptcy Act. 



— 8— 

6. The District Court erred in adopting the conclu- 
sion of law of the Referee to the effect that the Peti- 
tion was filed in good faith and should be approved. 

7. The District Court erred in adopting the conclu- 
sion of law of the Referee to the effect that the 
debtor is entitled to relief under Chapter X of the 
Bankruptcy Act. 

8. The District Court erred in adopting the conclu- 
sion of law of the Referee to the effect that The Sixty 
Trust is not entitled to have the Petition dismissed and 
that their prayer for dismissal should be denied. 

9. The District Court erred in adopting the con- 
clusion of law of the Referee to the effect that the Pe- 
tition in Chapter X of the debtor should be approved 
and that The Sixty Trust's prayer for dismissal of said 
Petition should be denied. 

10. The District Court erred in approving the Pe- 
tition of the debtor for relief under Chapter X of the 
Bankruptcy Act. 

Summary of Argument. 

On the question of good faith, The Sixty Trust con- 
tends that the District Court erred in approving and 
adopting the Referee's Report to the effect that the 
transfer of the Sorrento Property to University City 
(on the eve of filing of the Petition herein) by two 
of its principal shareholders, officers and directors did 
not result in a fraud upon any creditor. 

Carlos Tavares, the president of University City, and 
the sole witness called by the debtor at the hearing to 
sustain its burden of establishing good faith, admitted 
that the sole purpose of the transfer was to protect the 



— 9— 

individual equity held by Tavares and Kahn in said 
Sorrento Property from foreclosure by The Sixty 
Trust/ The evidence presented at the hearing on this 
issue compelled but one conclusion — that said transfer 
was an attempt by Tavares and Kahn to segregate a 
portion of their total personal assets so as to bring them 
within the injunctive powers of the District Court — 
protection that would not otherwise be available. Had 
Kahn and Tavares filed individual bankruptcy proceed- 
ings, all of their assets would have been submitted to 
the jurisdiction of the court and would have been avail- 
able to the creditors for satisfaction of claims. The 
transfer by Tavares and Kahn to University City of 
only the portion of their assets subject to deeds of trust 
held by The Sixty Trust, for the purpose of preventing 
foreclosure sales demonstrates a complete lack of good 
faith and constitutes a fraud upon The Sixty Trust. The 
District Court's sanction of this transfer is clearly er- 
roneous. 

The District Court Erred in Approving, Adopting 
and Confirming the Report of the Referee to 
the Effect That the Transfer of the Sorrento 
Property on the Eve of Filing the Petition Did 
Not Result in a Fraud Upon Any Creditor. 

Carlos Tavares, the president of University City 
since its incorporation and a director and a principal 
shareholder [V. I; 19:9-20; V. I; 21:3-5; V. I; 43:25- 
44:18], testified that, although University City was a 
record owner of 2,400 acres of land on the date the 



^"Q. And why was it you deeded that particular property to 
University City? 

"A. Well, we deeded it to University City because we wanted 
to protect our interest in the land that was being foreclosed by 
Sixty Trust." [V. I, 31 :20-24]. 



—10— 

Petition was filed [V. I; 20:18-21], approximately 900 
of those acres (the Sorrento Property) had been trans- 
ferred to University City immediately prior to the fil- 
ing of the Petition [V. 1; 28:9-13; Ex. Kj. The testi- 
mony established that until December 30, 1966, these 
900 acres of property had been owned by Sorrento 
Properties, Inc., a California corporation, owned by Ta- 
vares and Irvin Kahn [V. I; 30:26-31:4]. Sorrento 
Properties, Inc. was dissolved in December, 1966 [V. 
I; 30:16-19; Exs. F, G, and Ij, and all of its assets, 
including the 900 acres referred to herein as the Sor- 
rento Property, were transferred to Tavares and Kahn, 
individually [V. I; 31:5-15; Exs. I and J]. The Sor- 
rento Property was held by Tavares and Kahn individ- j 
ually until they transferred it to University City a 
few days prior to the filing of the Petition by grant 
deeds dated April 20, 1967 [V. I; 31 :16-19; Ex. K]. At 
the time of the transfer by Kahn and Tavares of the 
Sorrento Property to University City, ninety-nine per- 
cent of said property was subject to deeds of trust in 
favor of The Sixty Trust [V. I; 24:12-23 and 31:25- 
32:6] and a Notice of Default and Election to Sell 
under said deeds of trust had been published by The 
Sixty Trust [V. I; 32:7-9]. 

The timing of the transfer by Tavares and Kahn 
to University City and the filing of the Petition by 
University City leads inescapably to the conclusion that 
said transfer was accomplished solely for the purpose 
of bringing said property within the injunctive jurisdic- 
tion of the Court so as to protect the individual equity 
of Kahn and Tavares in said property. 

It is not necessary to rely upon an inference in the in- 
stant case — however compelling that inference may be — 



—11— 

since one of the principals involved, namely Tavares, ad- 
mitted under oath that he and Kahn "deeded [the Sor- 
rento Property] to University City because [they] 
wanted to protect [their] interest in the land that was 
being foreclosed by Sixty Trust" [V. I; 31 :22-24]. The 
Board of Directors of University City had full knowl- 
edge of the purpose of the transfer [Ex. D]. 

The foregoing evidence supports but one finding, 
namely that the transfer by Tavares and Kahn of the 
Sorrento Property to University City was accomplished 
for the sole purpose of bringing the Sorrento Prop- 
erty within the injunctive powers of the District Court 
and was intended to hinder, delay and prevent The Sixty 
Trust from proceeding with the noticed foreclosure sale 
and that such purpose was known to and acquiesced in 
by the Board of Directors of University City. 

Bankruptcy Courts have consistently refused to sanc- 
tion such transfers and have refused to maintain con- 
tinuing jurisdiction of such schemes. 

In Milwaukee Postal Building Corp. v. McCann (8th 
Cir. 1938), 95 F. 2d 948, a corporation issued bonds 
secured by a deed of trust upon certain property owned 
by said corporation. Subsequently, the real property 
encumbered by said deed of trust was transferred to an 
individual who held title subject to the deed of trust 
securing the bonded indebtedness. Defaults under the 
terms of the bonds occurred. After an unsuccessful at- 
tempt to resolve his difficulties with the bondholders, 
the individual owner of the real property formed a cor- 
poration, transferred all of his right, title and interest 
in said real property to the newly formed corporation, 
and caused said corporation to file a petition for re- 



—12— 

organization under the then applicable Section 77(b) 
of the Bankruptcy Act. 

The Circuit Court of Appeals, in affirming the lower 
court's dismissal of the petition, held that Section 77(b) : 
"[I]s confined to instances where the debtor is a 
corporation. It has nothing to do with the situa- 
tion where the debtor is an individual or a partner- 
ship — sections 74 and 75, as amended, U.S.C.A. 
Title 11, §§ 202 and 203, cover the field as to in- 
dividuals in so far as Congress deemed it wise so 
to do. It deals solely with corporate reorganiza- 
tions. This being true, it is clear that it would be 
not only a legal fraud upon creditors, but with- 
otit the intendment of this section to construe as 
within the section a corporation formed to and tak- 
ing over the property of an individual debtor for 
the purpose of utilising the section. * * *" (Em- 
phasis added). 

Mihvaukce Postal Building Corp. v. McCann, 95 
F. 2d 948, 950. 

The Court further emphasized that : 

" 'There is a duty in the courts to see that provi- 
sions of the act are not abused and that its privi- 
leges are extended only to those who are within 
the contemplation of the act.' " 

Milwaukee Postal Building Corp. v. McCann, 95 
F. 2d 948, 950. 

The holding of the Mihvaukee case is persuasive, if 
not compelling, authority for the proposition that the 
transfer of the Sorrento Property by Kahn and Tavares 
to University City a few days prior to the filing of the 



—13— 

Petition constituted grounds for dismissal of the Peti- 
tion. 

The fact that title to the Sorrento Property was held 
by a corporation prior to its transfer to Tavares and 
Kahn affords no distinguishing feature since the iden- 
tical situation was likewise present in the Milwaukee 
case. 

So too, in In re North Kemnore Building Corp. (7ih 
Cir. 1936), 81 F. 2d 656, the Circuit Court reversed the 
District Court's denial of the motion to dismiss, con- 
cluding that the creation of a corporation by an in- 
dividual in order to obtain greater protections for his 
individual assets constituted the type of scheme which 
could not be countenanced by a Court since the law 
was not intended to allow individuals to : 

"[CJlothe themselves in corporate garments for 
the purpose of taking advantage of the statutes 
appertaining thereto if, in financial extremis, the 
law respecting corporations seemed to afford great- 
er advantages. * * *" 

hi re North Kenmore Building Corp., 81 F. 2d 
656,657. 

Nor is it necessary that the transfer be fraudulent as 
to the secured creditors ; it is sufficient if its effect 
and purpose is to hinder and delay said creditors from 
enforcing their liens. Thus, in Shapiro v. Wilgns 
(1932), 287 U.S. 348, 77 L. Ed. 355, the United 
States Supreme Court, in an opinion by Justice Cardozo. 
held that a conveyance of all of an individual's property 
to a corporation could not be sustained even if the 
debtor's aim had been to prevent the disruption of his 



—14— 

business by creditors and to cause all of his assets to be 
protected for the benefit of all concerned. 

The Court found that : 

"[TJhe sole purpose of the conveyance was to di- 
vest the debtor of his title and put it in such a 
form and place that levies would be averted. * * *" 
Shapiro v. JVilgus, 287 U.S. 348, 353-354, 77 
L. Ed. 355, 358. 

As such it could not be sanctioned because : 

"A conveyance is illegal if made with an intent to 
defraud the creditors of the grantor, but equally it 
is illegal if made with an intent to hinder and delay 
them." 

Shapiro v. Wilgus, 287 U.S. 348, 354, 77 L. Ed. 
355, 358. 

See also: 

Mongiello Bros. Coal Corp. v. Honghtaling Prop- 
erties, Inc. (5th Cir. 1962), 309 F. 2d 925; 

Sherman v. Collins (8th Cir. 1934), 75 F. 2d 62; 

In re Cosgrave (S.D. Cal. 1935), 10 F. Supp. 
672. 

The intent and effect of the transfer by Kahn and 
Tavares to University City is factually indistinguish- 
able from the intent and effect of similar schemes con- 
demned in the foregoing cited authorities; the fact that 
Kahn and Tavares were not required to form a new 
corporation because of their control of an existing cor- 
poration is of no moment. The determining factor is 
that rather than each filing an individual bankruptcy 
proceeding and making all of their assets subject to 
creditor's claims, Kahn and Tavares segregated only a 



—15— 

portion of their holdings, namely the Sorrento Property, 
and transferred the same to University City, thereby 
shielding the Sorrento Property from foreclosure with- 
out subjecting their remaining assets to the jurisdiction 
of the Court. Moreover, they subjected the Sorrento 
Property, upon which The Sixty Trust held a secured 
lien, to the claims of the creditors of University City 
who would not otherwise have had the right to look 
to said property for satisfaction. Such manipulations 
of ownership for the purpose of hindering and delayinp; 
secured creditors from enforcing their liens liave not 
and cannot be countenanced. 

The District Court erred in refusing to follow these 
well-established precedents; it erred in approving, con- 
firming and adopting the Referee's Report to the effect 
that the transfer of the Sorrento Property did not work 
a fraud on any creditor and it erred as a matter of law 
in approving the Petition as having been filed in good 
faith. 

Conclusion. 

The Sixty Trust submits that the only finding con- 
sistent with the testimony in this case is a finding to 
the effect that transfer by Kahn and Tavares of the 
Sorrento Property to University City on the eve of the 
filing of the Petition solely to bring said property within 
the scope of the injunctive power of the District Court 
so as to enjoin The Sixty Trust from proceeding with 
foreclosure sales under its deeds of trust securing said 
property demonstrates such a lack of good faith as to 
compel, as a matter of law, a dismissal of the Petition 
of University City in its entirety. This is particularly 
true where, as here, the Board of Directors of Univer- 
sity City knowingly participated in the scheme. 



—16— 

Accordingly, The Sixty Trust respectfully petitions 
the Court of Appeals for its judgment reversing the 
order of the District Court approving the Petition and 
directing the District Court to dismiss said Petition 
as not having been filed in good faith. 

Alternatively, The Sixty Trust respectfully petitions 
the Court of Appeals for its judgment reversing the 
District Court's approval of the Petition insofar as it 
relates to the Sorrento Property and directing that the 
Sorrento Property be segregated from the remaining as- 
sets of this estate, that the Order restraining the stay 
be vacated insofar as it relates to such property, and 
that Appellants herein be given leave to enforce their 
liens against said property and to foreclose their deeds 
of trust thereon in accordance with the terms thereof 
as authorized by the lav^s of the State of California. 

Marsha K. McLean. 
Gibson, Dunn & Crutcher, 

Attorneys for Appellant 
The Sixty Trust. 



No. 22802 
IN THE 



United States Court of Appeals 

FOR THE NINTH CIRCUIT 



VS. 

\Vm. B. Enright, Trustee, etc., 



Appellee. 



BRIEF FOR THE APPELLEE, WILLIAM 
B, ENRIGHT, TRUSTEE. 



^ulme\t:r & KuPETz, ..j^^^ B. L.*-*" 

408 South Spring Street, 
Los Angeles, Calif. 90013, 

Attorneys for Appellee William B. 
Enright Trustee in the matter 
of University City, Debtor. 



Parker & Son, Inc., Law Printers, Los Angeles. Phone MA. 6-9171. 



TOPICAL INDEX 

Page 

List of Abbreviations Preface 

I. 
Statement of Jurisdiction 1 

IL 
Statement of the Case 2 

IIL 
Issue on Appeal 5 

IV. 
The Evidence and the Record 6 

V. 
Argument 1 1 



TABLE OF AUTHORITIES CITED 

Cases Page 

DeMet v. Harralson, CCH Bankruptcy Reports, 
para. 62838, p. 72443 15 

Kreuger v. Knickerbocker Hotel Co., 81 F. 2d 981 .. 14 

Statutes 

Bankruptcy Act, Sec. 137 2 

Bankruptcy Act, Sec. 144 2, 3, 4 

Bankruptcy Act, Sec. 146 2 

Bankruptcy Act, Sec. 146(3) 2 

United States Code, Title 11, Sec. 537 2 

United States Code, Title 11, Sec. 544 2, 3 

United States Code, Title 11, Sec. 546 2 

Textbook 
6 Collier on Bankruptcy (14th Ed.), p. 1028 13 



List of Abbreviations. 

P. Petition 

A. Answer to Petition for Reorganization 

R. Transcript of Record 

AR. Additional Transcript of Record 

V. I Volume I of Transcript of Proceedings held on 
June 28, 1967 

V. II Volume II of Transcript of Proceedings held 
on June 30, 1967 

V. Ill Volume III of Transcript of Proceedings held 
on June 30, 1967 

Tr. Transcript of Proceedings held on September 
21, 1967 

Ex. Exhibits to hearing held on June 28, 1967 and 
June 30, 1967 



No. 22802 
IN THE 



United States Court of Appeals 

FOR THE NINTH CIRCUIT 



The Sixty Trust, 

vs. 
Wm. B. Enright, Trustee, etc.. 



Appellant, 



Appellee. 



BRIEF FOR THE APPELLEE, WILLIAM 
B. ENRIGHT, TRUSTEE. 



I. 
Statement of Jurisdiction. 

The Debtor filed a voluntary petition for the re- 
organization of a corporation, pursuant to the pro- 
visions of Chapter X of the Bankruptcy Act (Title 
11 U.S.C. Sections 501-676). The jurisdiction of the 
United States District Court in this matter is predi- 
cated upon Title 11 U.S.C. Sections 46, 502, 511, 
and 528. 

The jurisdiction of the Court of Appeals to hear this 
matter on appeal is predicated upon Title 11 U.S.C. 
Sections 47, 48, and 521. 



— 2— 

II. 
Statement of the Case. 

University City, a California corporation, filed its 
petition for the reorganization of a corporation on 
April 25, 1967 [R. 2J. The District Court, upon con- 
sideration of the petition and the allegations contained 
therein, issued its initial order approving the petition and 
appointing Trustee, order of reference and restraining 
order and amendment thereto [R. 23-29]. Appellant, 
The Sixty Trust, a secured creditor of the Debtor, 
filed its answer to the petition for reorganization [R. 
37], pursuant to the provisions of Section 137 of the 
Bankruptcy Act (Title 11 U.S.C. Section 537), seek- 
ing dismissal of the Chapter X petition pursuant to the 
provisions of Section 144 of Chapter X of the Bank- 
ruptcy Act (Title 11 U.S.C. Section 544), on the 
ground that the proceedings were not filed in good faith 
within the meaning of Section 146 of Chapter X of 
the Bankruptcy Act (Title 11 U.S.C. Section 546). 

The answer of appellant denied certain allegations of 
the petition, and put the Debtor to its proof. The major 
thrust of appellant in the proceedings below as set 
forth in the second defense of the answer of appellant 
[A. 3, R. 27] was that the petition was not filed in 
good faith as defined in Section 146(3) of the Bank- 
ruptcy Act, in that it is unreasonable to expect that 
a plan of reorganization can be effected by the peti- 
tioner for certain reasons set forth in the answer. Ap- 
pellant also set forth as a special defense to the pro- 
ceeding, that a portion of the Debtor's real property 
had been transferred to it shortly before the Chapter 
X proceedings by certain officers, shareholders and di- 
rectors for the purpose of bringing said property with- 



— 3— 

in the injunctive power of the corporate reorganiza- 
tion court. 

There was a two-day hearing before the Referee 
and Special Master, pursuant to Section 144 of the 
Bankruptcy Act (Title 11 U.S.C. Section 544), fol- 
lowing which the Referee and Special Master, on Au- 
gust 16, 1967, filed her report and proposed findings of 
fact and conclusions of law [R. 76-81]. Appellant filed 
its objections to the report, findings and conclusions of 
the Referee and Special Master [R. 84-96], and oral 
argument was presented to the District Judge. The 
District Court, on October 3, 1967, issued its order con- 
firming the Referee and Special Master's report, find- 
ings and conclusions of law, and approving petition pur- 
suant to Section 144 [R. 102]. The report of the Ref- 
eree and Special Master, which was confirmed and ap- 
proved by the District Judge, and her findings of fact 
and conclusions of law which were adopted as the find- 
ings of fact and conclusions of law of the District 
Court, are enlightening and an appropriate starting 
point for consideration of this appeal. 

The essential jurisdictional requirements of Chapter 
X were found to exist. It was found in Finding of 
Fact 6 that the principal assets of the Debtor consist 
of approximately 2400 acres of real property situated 
in the northern part of the city of San Diego, consist- 
ing of approximately 1500 acres known as University 
City, with a fair market value of approximately $15 
Million to $17 Million and approximately 900 acres 
known as Sorrento Properties, with a fair market value 
of $5 Million. The total value of the real property was, 
therefore, found to be between $20 Million to $22 
Million. The indebtedness owing to appellant was found 



to be approximately $10,390,000.00 as of April 28, 
1967. In view of this substantial equity over and above 
the lien of appellant herein of approximately $10 Mil- 
lion, the Court found, in Finding of Fact 8, that it 
was reasonable to expect that a plan of reorganization 
could be effected. The Court further found in Finding 
of Fact 10 that the Debtor's petition was filed in good 
faith as required by Section 144 of the Act. The Ref- 
eree and Special Master reported that the property 
known as the Sorrento Properties, was subject to the 
same indebtedness as the Debtor owed to appellant at 
the time it was transferred to the Debtor, and that be- 
cause of its location near the other properties of the 
Debtor, it is reasonable to develop it as one unit. The 
Referee and Special Master upon consideration of the 
evidence, reported that the transfer of the property to 
the Debtor was in the interest of the Debtor, because 
the Debtor acceded to a large equity in said property, 
and furthermore that the transfer did not result in a 
fraud upon any creditor. The court concluded, in Con- 
clusion 5, that the petition was filed in good faith and 
should be approved, and in Conclusion 6, that the Debt- 
or is entitled to relief under Chapter X of the Bank- 
ruptcy Act. 

The thrust of the position of appellant in the Court 
below was that it was unreasonable to expect that a 
plan of reorganization could be effected in the fact 
of the opposition of The Sixty Trust. Therefore, the 
proceedings should be dismissed. This is shown in the 
objections to the report of the Special Master, findings 



of fact and conclusions of law upon contested petition 
filed under Chapter X [R. 84] page 11, lines 25 through 
27, wherein it was stated as follows : 

"The only issue before the Court is whether it is 
reasonable that a plan of reorganization can be ef- 
fected in the face of the announced opposition of 
The Sixty Trust, . . .". 

It is apparent that the appellant has now abandoned 
its attack on the essential allegations of the petition; 
have accepted the essential findings that there is a sub- 
stantial equity in the real property, and that it is rea- 
sonable to expect that a plan of reorganization can be 
effected, and have, instead, chosen to rely on the fact 
that out of 2400 acres belonging to the Debtor, some 
900 acres thereof were transferred to the Debtor short- 
ly before the filing of these proceedings, in order to 
bring said property within the jurisdiction of the re- 
organization court, as the sole basis to force a dis- 
missal of the entire Chapter X proceedings. 

III. 
Issue on Appeal. 

Assuming all of the findings of fact of the District 
Court are correct, and assuming all of the conclusions 
of law of the District Court are correct, must the fact 
that, shortly prior to the filing of the Chapter X pro- 
ceedings two of the principals of University City trans- 
ferred 900 out of the 2400 acres to University City, 
force the Appellate Court to direct a dismissal of the 
corporate reorganization proceedings under the circum- 
stances of this case. 



— 6— 

IV. 
The Evidence and the Record. 

Appellant, in its brief, has examined one sentence in 
three volumes of transcript, and has ignored all the 
rest. Appellant has cited Mr. Carlos Tavares, a candid, 
honest and highly respected man, as testifying, 

"Well, we deeded it to University City because 
we wanted to protect our interest in the land that 
was being foreclosed by The Sixty Trust" [V. I, 
31:20-24]. 

Now, let us look at the rest of the record. 

Sorrento Properties, Inc. was a corporation that was 
dissolved in December, 1966 [V. I, p. 30, line 16]. 
Just prior to its dissolution, it owned some 900 acres 
of real property immediately adjacent to the real prop- 
erty owned by University City [V. I, p. 31, line 4]. 
The original shareholders and principals of both Uni- 
versity City and Sorrento Properties, Inc., to wit, Kahn. 
Tavares, and Lesser, are substantially the same [V. 
II, p. 55, line 24]. Sorrento Properties, Inc., owned by 
the same principals as University City, never really 
functioned, but served only as an appendant to and 
adjunct of University City. Sorrento never issued any 
stock [V. IT, p. 51, line 10]. It never sold any of its 
real property during its existence [V. II, p. 49, line 13]. 
Its Board of Directors never functioned [V. II, p. 55, 
line 1 ] . That every dealing Sorrento had were so inter- 
related with the affairs of University City, as to make 
their separate existence a fiction. Consider the follow- 
ing evidence. Tavares testified with reference to the 
affairs of Sorrento Properties [V. IT, p. 53. line 13] : 
"Early in 1961, we (Sorrento) had a first loan 
with Pacific Finance of which totalled almost two 



— 7— 

and a half million, and all the money that was re- 
ceived on the two and a half million went to Uni- 
versity City." 

The supplemental clerk's transcript of record at page 
29 shows this promissory note dated July 10, 1961 
in the amount of $2,500,000.00 in favor of Pacific Fi- 
nance Corporation. It was actually executed by both 
Sorrento Properties, Inc. and University City. This note 
and the trust deed which covers the property of both 
corporations were assigned to The Sixty Trust [Sup- 
plemental Clerk's Transcript p. 74], and makes up part 
of the claim of The Sixty Trust and its wholly-owned 
subsidiary S.D. Land, Inc. 

In 1963, University City borrowed an additional 
$4,250,000.00 from The Sixty Trust, increasing its 
obligation to The Sixty Trust to $9,250,000.00 [Supple- 
mental Clerk's Transcript, p. 10]. The note was exe- 
cuted only by University City. However, the deed of 
trust given to secure the note of $9,250,000.00 was 
executed both by University City and Sorrento Prop- 
erties, Inc. The property covered in said deed of trust, 
which stood as security for said note, is the property of 
both University City and Sorrento Properties, Inc. 
[Supplemental Clerk's Transcript, p. 35]. Similarly, the 
succeeding notes to The Sixty Trust in 1964 and Feb- 
ruary 1, 1965, were executed only b}^ University City. 
However, the deeds of trust covered the property of 
both University City and Sorrento Properties, Inc. 
[Supplemental Clerk's Transcript pp. 17-28, 55-65]. 

What happened to the money University City bor- 
rowed from The Sixty Trust in 1963? Mr. Tavares 
testified [V. II, p. 39, line 17] : 

"When Mr. Kahn in 1963 went to Sixty Trust 
to get an additional loan of $5 Million, he finally 



— 8— 

got $4,250,000, and there was not adequate securi- 
ty of University City, based on their 60% loan or 
70% loan, and they required land from Sorrento 
Properties to be used as collateral." 

Of the monies borrowed by University City in 1963, 
it paid over $657,000.00 thereof to Sorrento Properties, 
Inc. [V. II, p. 53, line 21]. In other words, in 1961 
Sorrento had paid over some two and a half million dol- 
lars to University City. In 1963 University City had 
paid over some $657,000.00 to Sorrento. Mr. Tavares 
testified in some detail concerning these transfers of 
money [V. II, p. 53, line 21] : 

"... the only monies that Sorrento Property got 
in 1963 was the $657,000.00 in cash to pay off 
some first trust deeds that were 5% trust deeds 
stating in there, 10% loan from Sixty Trust. Mr. 
Kahn used Sorrento Properties' cross-collateralized, 
used it primarily as a vehicle to provide money for 
University City, and there is no question about 
that. 

"Q. And you disapproved of course ? 
"A. I didn't say I disapproved; the only way 
that Sorrento Properties and University City could 
be one and only, and I would have had no ob- 
jection. 

"O. They weren't ? 

"A. They might not have been, because you 
have two different corporations, BUT ACTUAL- 
T.Y. T THINK THEY WERE." (Emphasis 
added). 

By the time Sorrento Properties. Inc. was dissolved 
in December of 1966, Tavares had bought out Lesser 's 
interest and the assets of Sorrento Properties, Inc. was 
to be divided two-thirds to Tavares and one-third to 



Kahn [V. I, p. 31, line 7]. This dissolution was en- 
tered into for tax purposes [V. II, p. 83, line 17]. 
Shortly before the filing of the Chapter X proceedings, 
the 900 acres formerly belonging to Sorrento Proper- 
ties, Inc. was transferred into the name of University 
City [V. II, p. 94, line 7]. 

Immediately before the transfer of the 900 acres 
from Sorrento to University City, the books of Uni- 
versity City showed an account receivable due from 
Sorrento Properties, Inc. in the amount of $2,661,813.09. 
This receivable from Sorrento to University City was 
eliminated upon the transfer of the land [V. I, p. 82, 
line 11; p. 83, line 18]. 

In other words, immediately prior to the filing of 
the Chapter X proceedings, the Debtor was indebted 
to The Sixty Trust in an amount approximating $10 
Million. The principals of University City and Sorrento 
Properties, Inc. allocated the total amount of those loans 
and determined that $2,661,813.09 was Sorrento's share. 
This receivable then represented the allocate share 
charged to Sorrento of the monies borrowed by Univer- 
sity City on the note and trust deeds held by The Sixty 
Trust [V. II, p. 68, line 14]. 

So intertwined were the financial affairs of Univer- 
sity City and Sorrento Properties, Inc., that merger 
was discussed between them in 1963 and 1965 [V. Ill, 
p. 131, line 17]. 

Not only were their financial affairs inexorably in- 
tertwined, but the properties owned by the two "sepa- 
rate" entities was immediately adjacent to one another 
and basically part of one development. Sworn state- 
ment of Mr. Tavares was quoted by the appellant in 
its opening brief. Mr. Tavares, however, went on to 



—10— 

explain that statement and the explanation was not 
quoted by the appellant. We now refer the Honorable 
Court of Appeals to Mr. Tavares' explanation as to 
why the 900 acres was put into the reorganization pro- 
ceedings of University City [V. I, p. 38, line 4] : 

"On that date, Mr. Kahn and myself and the 
rest of the Directors of University City decided 
that this was the best course, because there was 
no other way for us to look at it. There was only 
one loan that covered the entire indebtedness, and 
Sorrento Properties was cross-collateralized and 
we couldn't possibly segregate it. 

"Referee Rossi: Was it considered as one deal? 
"The Witness : One development." 

Further at V. I, page 38, line 21 : 

"Q. Tell me who you meant when you indi- 
cated it was always considered by all of you as one 
development ? 

"A. Mr. Lesser, Mr. Kahn and myself; we 
have always considered this as one development, 
because when we agreed to put a loan with Sixty 
Trust, we gave up some very good valuable piece 
of property to help University City." 

So the logic of the transaction becomes apparent. 
How can you reorganize a part of a development? If a 
reorganization was to make sense the entire develop- 
ment had to be reorganized as an entity. This was not 
a last minute device to hinder, delay or defraud any- 
one. The parties always considered this to be one de- 
velopment, and the Referee and the District Judge so 
found. They believed Mr. Tavares when he testified as 
to the basis of the transfer and that the transfer was 
not to defraud creditors [V. I, p. 32, line 10; p. 33, 
line 8]. 



—11— 

V. 
Argument. 

On appeal, it is basically not the duty of the appel- 
lee to show that there is evidence in the record to sup- 
port the findings and conclusions of the District Court. 
Nevertheless, so convinced is the Trustee, not only 
that the findings and conclusions of the District Court 
were not clearly erroneous, but rather, that the facts, 
the logic and the realities of the situation compelled the 
decision that was reached by the Referee and Special 
Master, and by the District Judge. 

The appellant has referred this Honorable Court to 
cases which are not at all applicable to the factual situa- 
tion of these proceedings. The Sixty Trust is not es- 
sentially a creditor of Sorrento Properties, Inc., or of 
Kahn and Tavares in connection with its claim herein. 
It is a creditor of University City. How could it be 
defrauded, or how could any of the creditors of Univer- 
sity City be defrauded by the deeding to University 
City of additional assets? If the insolvency cases cited 
are a correct statement of the law, and we submit they 
are not generally accepted as a correct statement of 
the law, they are still not applicable to the facts of this 
case. First, The Sixty Trust and the other creditors of 
University City could not have been hindered, delayed 
or defrauded by the deeding to University City of ad- 
ditional assets. Second, University City was not an en- 
tity created and set up by Kahn and Tavares in order 
to hinder, delay or defraud its creditors. No such cred- 
itors of Kahn or Tavares have come into these proceed- 
ings to complain of the transfer. They would appear 
to be the only such creditors with standing to complain. 
What we have in this case were obligations against the 



—12— 

land in favor of a creditor of University City, which 
obligations against the land remained unchanged before 
and after the deeding. As Judge Carter stated in the 
hearing below [Tr. p. 4, line 11] : 

"How did deeding it to University City protect 

their interests?" 

At Hue 14 he stated: 

"It couldn't change the obligations against the 
property, could it?" 

Finally, at page 6, line 17 Judge Carter stated: 

"The Sixty Trust still had the same obligations 
on the property, secured obligations, it had before, 
right? Their prejudice, if any, is the delay that 
might entail from a Chapter X." 

It is clear then, that the District Judge, as well as 
the Referee and Special Master, concluded that this was 
not a case of fraud and that there was no absence of 
good faith. Their decision, surely was not "clearly er- 



roneous". 



The factual situation of these proceedings shows 
up the danger of attempting to apply a hard and fast 
rule of law to every case at hand. The cases cited by 
appellant stand for the proposition that where an in- 
dividual debtor transfers his assets to a newly formed, 
wholly owned corporation, which thereby acquires all of 
its assets, and thereby assumes all of its obligations, 
and such newly formed corporation immediately files a 
voluntary petition for reorganization, a legal fraud has 
been perpetrated, which would justify the Court, ipso 
facto, in dismissing the reorganization proceedings. 



—13— 

This matter is commented on succinctly in 6 Collier 
oil Bankruptcy, 14th Edition, page 1028. The author 
states : 

"As to whether this constitutes bad faith, the 
courts are not in agreement. The Eighth Circuit 
has declared that such a transaction perpetrates a 
legal fraud on creditors and that it is without the 
intendment of the statute to construe as within the 
scope a corporation formed to take over the prop- 
erty of an individual debtor for the purpose of 
using the statute. The Seventh Circuit, however, 
has taken the position that circumstances may war- 
rant a departure from such a rule. In Matter of 
Loeb Apartments, Inc.,, (CCA 7th. 1937) 89 F.2d 
461 the court stated: 

'No one evidentiary fact can ordinarily be given 
paramount weight in deciding the question. If it is 
obvious that if a debtor is attempting unreason- 
ably to defer and harass creditors in their bona 
fide efforts to realize upon their securities, good 
faith does not exist. But if it is apparent that the 
purpose is not to delay or defeat creditors but 
rather to put an end to long delays, administra- 
tive expenses, statutory periods of redemption and 
unreasonable obstruction by minorities, incident too 
frequently, we are sorry to observe, to mortgage 
foreclosure, and to invoke the operation of the act 
in the spirit indicated by Congress in the legisla- 
tion, namely, to attempt to effect a speedy efficient 
reorganization, upon a feasible basis, supported by 
more than two-thirds of all the creditors, good 
faith cannot be denied.' 

'. . . It is urged that the fact that it seems prob- 
able that this corporation was organized for the 



—14— 

purpose of filing a petition ... is a bar to a find- 
ing of good faith. No court is justified in making 
this one fact, arbitrarily, the determinative fac- 
tor of good faith.' 

"This .seems to be the better view and exempli- 
fies the flexible nature of the concept of good faith 
in its relation to the particular conditions presented 
for the judge's scrutiny." 

To the same effect see Kreuger v. Knickerbocker 
Hotel Co. (CCA 7th. 1936) 81 F. 2d 981. 

Your Trustee, therefore, would take the position that 
even if University City were newly organized on the 
eve of the filing of the Chapter X proceedings for the 
sole purpose of filing the Chapter X proceeding, and 
even if University City had received all of its assets 
and liabilities from Kahn and Tavares on the eve of 
filing the Chapter X proceedings, the District Judge 
would be justified in going into all of the facts sur- 
rounding the transfers in determining good faith. 

However, this is not the fact in these proceedings. 
The cases cited and the proposition of law urged by 
the appellant herein are just not applicable to these pro- 
ceedings. University City existed and did business, in- 
cluding substantial business with appellant, for years. 
The proof of claim filed by The Sixty Trust herein 
contains promissory notes and deeds of trust going 
back to July 10, 1961. [Supplemental Clerk's Tran- 
script, p. 6j. In addition, the obligations of University 
City in these proceedings are not the obligations of 
Kahn and Tavares, but the obligations of University 
City. In addition, the major portion of the property was 
not deeded to it by Kahn and Tavares, but was owned 



—15— 

by University City for years. Only 900 out of 2400 
acres were deeded. 

Finally, appellant has asked this Court, at the very 
minimum, to exclude, "the transferred property from 
the reorganization proceeding and the vacating of the 
restraining order relative to their property" (Appel- 
lant's opening brief, p. 7). 

Appellant argued this same issue before the Referee 
and Special Master and before the District Judge. Both 
concluded that the instant proceeding was a good faith 
hearing only; that good faith was the only matter be- 
fore the Court to decide ; not whether or not leave should 
be granted to foreclose on a particular portion of the 
property of the Debtor. Such an issue as was stated 
by the Referee and Special Master [V. I, p. 42, line 
18]: 

"Well, that would unduly complicate the present 
proceeding. It seems to me if you want to lift the 
restraining order, file a petition and bring it on for 
hearing and put on evidence; that is a separate is- 
sue in itself and not properly at issue, I don't be- 
lieve in the Section 144 answer, but you can bring 
it on and I will hear it if you want to. I don't 
want to have it mixed up." 

The Trustee urges that the Referee and Special Mas- 
ter and the District Judge were both correct in refus- 
ing to be so sidetracked. 

The Trustee urges upon this Court a reading of the 
very recent case of DeMet v. Harralson (C.A. 5th, 
1968) CCH Bankruptcy Reports, paragraph 62838, p. 
72443 at 72445, where in the Court stated : 

"As an appellant tribunal, we must give defer- 
ence to the finding of the referee who was in 



— 1^- 

closer proximity to the economic life of the bank- 
rupt, to the parties involved in its birth and demise, 
and to its transactional history." 

Further at page 72445 : 

"Moreover, application of the clearly erroneous 
doctrine becomes paramount when, as here, the 
district court has approved the referee's determina- 
tion. 

Your Trustee respectfully concludes by urging not 
only that the decision of the District Court and the 
Referee and Special Master were not clearly erroneous, 
but rather, that they were eminently correct. The fact 
that appellant has withdrawn from its attack upon the 
position that it was unreasonable to expect that a plan 
of reorganization could be effected, the fact that the 
appellant has withdrawn from its attack on the elements 
in the petition essential to support approval of a Chap- 
ter X proceeding, the fact that the appellant has in- 
stead chosen to rely on one fact alone, namely the trans- 
fer of 900 acres shortly before the filing of the pro- 
ceedings, and the fact that the record and the evidence 
amply show that this transfer was not fraudulent and 
that there were good, economic and business reasons 
for the transfer to take place, and for the 900 acres 
to be included in the reorganization, all point to the 
soundness of the decision below. Your Trustee respect- 
fully urges that the decision below be affirmed. 

Respectfully submitted, 

Irving Sulmeyer, 
sulmeyer & kupetz. 
Attorneys for Appellee William B. 
Enright, Trustee in the matter 
of University City, Debtor. 



No. 22802 
IN THE 



United States Couft of Appeals 

FOR THE NINTH CIRCUIT 



The Sixty Trust, 

Appellant, 
vs. 

Wm. B. Enright, Trustee, Etc., 

Appellees. 



REPLY BRIEF FOR APPELLANT. 



Dean C. Donlavey, F I L E D 

Charles R. Collins, 

Marsha K. McLean, qqj i g iggg 

Gibson, Dunn & Crutcher, 

634 South Spring Street, yvM. B, LUCK„ CLERK 

Los Angeles, Calif. 90014, 

Attorneys for Appellant. 



Parker & Son, Inc., Law Printers, Los Angeles. Phone MA. 6-917L 



TOPICAL INDEX 

Page 
List of Abbreviations Preface 

I. 
Jurisdictional Statement 1 

IL 
Statement of the Case 1 

IIL 
Questions for Decision by This Court 2 

IV. 
Specification of Errors Relied Upon 3 

V. 
Argument 3 

VI. 
Conclusion 12 



TABLE OF AUTHORITIES CITED 

Cases Page 

Knickerbocker Hotel Co., In re, 81 F. 2d 981 
8, 9, 11, 12 

Milwaukee Postal Building Corj). v. McCann, 95 F. 
2d 948 12 

North Kenmore Building Corp., In re, 81 F. 2d 
656 12 

Shapiro v. Wilgus, 287 U. S. 348 12 



List of Abbreviations. 

P. Petition 

A. Answer to Petition for Reorganization 

R. Transcript of Record 

AR. Additional Transcript of Record 

V. I Volume I of Transcript of Proceedings held on 

June 28, 1967 

V. II Volume II of Transcript of Proceedings held 
on June 30, 1967 

V. Ill Volume III of Transcript of Proceedings held 
on June 30, 1967 

Tr. Transcript of Proceedings held on September 

21, 1967 

Ex. Exhibits to hearing held on June 28, 1967 and 

June 30, 1967 



No. 22802 
IN THE 



United States Court of Appeals 

FOR THE NINTH CIRCUIT 



The Sixty Trust, 

vs. 
Wm. B. Enright, Trustee, Etc., 



Appellant, 



Appellees. 



REPLY BRIEF FOR APPELLANT. 



L 
Jurisdictional Statement. 

The basis upon which this Court has jurisdiction to 
review the propriety of the Order of the District Court 
from which the instant appeal was taken was set forth 
under this heading in the Opening Brief For Appellant 
and shall not be repeated. 

IL 
Statement of the Case. 

The relevant historical and evidentiary background of 
this controversy was set forth under this heading in 
the Opening Brief for Appellant filed herein and ref- 
erence is made thereto. The Brief filed on behalf of 
Appellee Enright incorrectly asserts that Appellant has 
abandoned its attack on the allegations of the Petition 
and has accepted the findings that there is an equity 
in the real property and that it is reasonable to expect 



— 2— 

a Plan of Reorganization to be effected. Such is not 
the case. As set forth in the Oldening Brief for Ap- 
pellant under the heading Specification of Errors Relied 
Upon, Appellant claims that the District Court erred 
in adopting and approving the Referee's Report, Find- 
ings of Fact, and Conclusions of Law. Since the Re- 
port, Findings and Conclusions were listed as Errors 
Relied Upon by Appellant in its Opening Brief, Appel- 
lant clearly has not "abandoned" any issue or "accepted" 
any such findings. The bases upon which Appellant 
claims the Report, Findings and Conclusions to be er- 
roneous are set forth in the Objections to Proposed 
Report of Special Master [R. 62-75], Objections to Re- 
port of Special Master [R. 84-96], and Supplementary 
Objections to Report of Special Master [R. 97-100]. 

TIL 
Questions for Decision by This Court. 

The sole issues before this Court are whether the 
District Court erred in approving the Report, Find- 
ings and Conclusions of Special Master; whether two 
individuals may segregate a portion of their individual- 
ly-owned property, transfer that property to a controlled 
corporation, and then cause that corporation to file a 
Reorganization Petition so as to bring said property 
within the automatic injunctive power of the District 
Court and thus protect their individual equity in said 
property from foreclosure by the holder of deeds of 
trust encumbering said property; whether such a trans- 
fer on the eve of filing of the Reorganization Petition 
shows such a total absence of good faith as to taint 
the entire proceeding requiring a dismissal of the Pe- 
tition; and whether such a transfer shows a sufficient 
lack of good faith to require, at the very minimum. 



— 3— 

the exclusion of the transferred property from the re- 
organization proceeding and the vacating of the re- 
straining order relative to said property. 

IV. 
Specification of Errors Relied Upon. 

The specification of errors relied upon are set forth 
in detail in the Opening Brief filed by Appellant and 
will not be repeated here. 

V. 
Argument 

The primary issue before this Court is whether the 
transfer of the Sorrento Property by Kahn and Tavares 
to University City on the eve of bankruptcy was done 
in good faith. Appellant submits that the intent of Ta- 
vares and Kahn at the time they acquired title to the 
Sorrento Property from Sorrento Properties, Inc. on 
December 30, 1966 and the intent of Tavares and Kahn 
at the time they transferred title to University City 
on April 20, 1967 are the crucial relevant factors to 
be considered on the issue of good faith. 

There is no dispute on the record as to either the 
method by which University City acquired title to the 
Sorrento Property or the intent of Tavares and Kahn at 
each step of the proceedings. 

As of December, 1966, the 900 acres designated here- 
in as the Sorrento Property was owned by a California 
corporation entitled Sorrento Properties, Inc. [V. I; 
29:18-31:11]. As of December, 1966, this corporation 
was owned two-thirds by Tavares and one-third by 
Kahn [V. I; 31:7-11]. On December 30, 1966, Sor- 
rento Properties, Inc. was dissolved and all assets and 
liabilities of Sorrento Properties, Inc., including the 900 



— 4— 

acres designated herein as the Sorrento Property, was 
transferred two-thirds to Tavares and one-third to Kahn 
individually [V. I; 31:5-15; Ex. J.]. The intent of ih.. 
parties at the time of the transfer of the Sorrento 
Property from Sorrento Properties, Inc. to Tavares and 
Kahn is best expressed by the following testimony of 
Tavares at the good faith hearing : 
[By Mr. Dunlavey] 

"Q. Was the intent at the time these Deeds were 
executed, this was going to be the first step toward 
putting Sorrento Property over into the Universi- 
ty City? 

A. This was not the first step in putting this 
property into University City." [V. II; 83:12-16]. 
* * * * 

[By Mr. Dunlavey] 

"Q. Can you tell me, Mr. Tavares, either yes or 
no, whatever the explanation you want to give 
after that, whether these Deeds were given at 
the time when you intended that the property ul- 
timately was going to be reconveyed to University 
City. 
A. On my word of honor, no." [V. II; 84:1-7]. 

In April of 1967, immediately prior to the filing of 
the Reorganization Petition by University City, Kahn 
and Tavares transferred the Sorrento Property to Uni- 
versity City [Ex. K]. The intent of the parties as 
to the purpose of this transfer is again best explained 
by the following testimony of Tavares : 

[By Mr. Dunlavey] 

"Q. And why was it you deeded that particular 

property to University City? 



— 5— 

A. Well, we deeded it to University City because 
we wanted to protect our interest in the land that 
was being foreclosed by Sixty Trust." [V. I; 31: 
20-24]. 

The Board of Directors of University City had full 
knowledge that such was the purpose of the transfer 
[Ex. D]. 

Thus, regardless of the evidence relied upon by Ap- 
pellee Enright at pages 6 through 10 of his Brief, it is 
clear that the dissolution of Sorrento Properties, Inc. on 
December 30, 1966 was not the first step in putting the 
Sorrento Property into University City and that the in- 
dividual principals had no intent as of December 30, 
1966 to transfer the Sorrento Property to University 
City. The transfer to University City was only ulti- 
mately made by Kahn and Tavares on April 20, 1967 
to save their individual equity in the Sorrento Prop- 
erty from being foreclosed by Appellant. These are the 
pertinent facts that compel the conclusion that the 
transfer exhibits such a lack of good faith as to dictate 
a dismissal of the entire reorganization proceeding, or 
at the very least, a segregation of the Sorrento Property 
from the remaining assets and the vacating of the re- 
straining order as to such property so as to allow Ap- 
pellant to proceed to foreclose its deeds of trust thereon. 

Appellee Enright states that the Court should ignore 
this pertinent conclusive testimony and should look to 
the other factors outlined at pages 6 through 10 of his 
Brief. Thus, he refers to a prior history of dealings 
and states that "the original shareholders and principals 
of both University City and Sorrento Properties, Inc. 
. . . are substantially the same" (Brief for Appellee 
Enright, p. 6) and further that "Sorrento Properties, 



Inc. [was] owned by the same principals as University 
City." (Brief for Appellee Enright, p. 6). Such was 
not the case. Since 1964, Carlos Tavares and Irvin J. 
Kahn were the only shareholders of University City 
who also held an ownership interest in Sorrento Prop- 
erties, Inc. [V. I; 63:9-19]. In addition to Kahn and 
Tavares, the shareholders of University City included 
Louis Lesser Enterprises, Ltd. which owned 20%, Mr. 
Carlstrom who owned 20%, and Mr. Smith who owned 
10% [V. I; 44:3-18]. None of these individuals had 
any ownership in Sorrento Properties, Inc. from 1964 to 
its dissolution. Accordingly, since at least 1964, the 
holders of 50% of the stock of University City had 
absolutely no proprietary interest in Sorrento Properties, 
Inc. Obviously, University City and Sorrento Proper- 
ties, Inc. were separate corporations with separate own- 
ership. 

Appellee Enright also states that the Sorrento Prop- 
erty was "immediately adjacent" to the land owned by 
University City (Brief for Appellee Enright, p. 9). 
Such is not the case. The Sorrento Property consists 
of six non-contiguous separate parcels, each of which is 
a considerable distance from the land owned by Univer- 
sity City and from each other [Ex. 3]. The "one de- 
velopment" idea was obviously not true in December of 
1966 since Tavares testified that he had no intent at 
that time of transferring the Sorrento Property to Uni- 
versity City [V. II; 83:12-84:7]. 

Appellee Enright also indicates that merger discus- 
sions occurred between the principals of University City 
and Sorrento Properties, Inc. in 1963 and 1965 (Brief 
for Appellee Enright, p. 9). Significantly, however, no 
merger ever took place. 



— 7— 

Appellee University City also urges this Court to 
ignore the admitted purpose of the transfer of the 
Sorrento Property to University City because University 
City allegedly acceded to a large equity in the Sorrento 
Property by accepting the same in full payment of a re- 
ceivable in the amount of $2,661,813.09 owed by Sor- 
rento Properties, Inc. [V. I; 82:11-83:18] and assumed 
by Kahn and Tavares on the dissolution of Sorrento 
Properties, Inc. [Ex. I]. The alleged equity presum- 
ably stems from the difference between the value of the 
Sorrento Property, found by the Referee and approved 
by the District Court, to be $5,000,000 and the receiv- 
able of $2,661,813.09. The finding of value was prem- 
ised solely upon the testimony of Carlos Tavares, ad- 
mitted over the objection of Appellant, to the effect 
that the property was worth $5,000,000 [V. I; 25: 
10-23]. Appellant contended and still contends that 
such testimony of a person admittedly interested in the 
outcome of the proceeding cannot be sustained in light 
of the fact that the Sorrento Property was acquired 
from 1959 to 1962 for a total purchase price of $1,- 
320,798.00 [Ex. H; V. I; 62:14-17; V. II, 59:21-24]. 
Except for some water and sewer lines, the Sorrento 
Property is in the same raw, undeveloped, unim- 
proved condition as when acquired [V. I ; 62 :2-5 : V. 
II; 65:2-12]. The terrain is rolling with gullies [V. 
II; 75:25-26] and has not been graded [V. II; 65: 
2-5]. It has no access to any freeway or roads [V. II; 
65 :2-5 ; V. II ; 65 : 10-12] and is several years away from 
development [V. II; 113:23-114:1]. 

As late as 1964, Tavares purchased the one-third in- 
terest of Louis Lesser Enterprises, Ltd. in Sorrento 
Properties, Inc. for a $500,000 non-interest-bearing 



— 8— 

note [V. I; 63:9-19]. Accordingly, as late as 1964, 
even the owners of the Sorrento Property valued it at 
not more than $1,500,000. To say that the same prop- 
erty valued by the parties at $1,500,000 in 1964 is some- 
how magically worth $5,000,000 in 1967 is contrary to 
reason and logic. Accordingly, Appellant submits that 
University City acceded to no equity in the property. 

In point of fact, another reason for the transfer by 
Kahn and Tavares of the Sorrento Property to Univer- 
sity City probably stems from their fear that the Trus- 
tee in Reorganization would look to them for payment 
of the $2,661,813.09 receivable which they assumed at 
the dissolution of Sorrento Properties, Inc. [Ex. 1]. In- 
stead of paying this amount, however, they discharged 
the receivable of $2,661,813.09 by transferring the 
Sorrento Property which they had valued as recently 
as 1964 as being worth only $1,500,000. 

Appellant submits that all of the arguments advanced 
by Appellees are mere window dressings designed to 
hide the crucial elements of the intent and purpose be- 
hind the transfer. Even Appellee University City ad- 
mits that the fact that property was transferred to a 
debtor for the purpose of obtaining the injunctive pro- 
tection offered by Chapter X is a factor to be consid- 
ered in determining good faith (Brief for Appellee 
University City, p. 8). Appellee University City relies 
heavily upon In re Knickerbocker Hotel Co. (7th Cir. 
1936, 81 F. 2d 981) but fails to point out to the Court 
the rather unique factual situation that existed in that 
case. In Knickerbocker, a corporation had issued bonds 
secured by a deed of trust. Upon default in the bonds, 
a bondholder's protective committee was organized and 
approximately 98% of the unpaid bonds were deposited 



— 9— 

with such committee. The Trustee under the inden- 
ture securing the bonds filed an action to foreclose the 
mortgage in a state court and a receiver was appointed 
to operate the properties. The bondholder's committee 
bid in at the foreclosure sale and purchased the prop- 
erty. The bondholder's committee, with the approval 
of the holders of 98% of the unpaid bonds, formulated 
a plan for reorganization which they sought to effec- 
tuate in the state court proceeding. The chancellor re- 
fused to confirm the sale or the plan, removed the re- 
ceiver and enjoined any person from bringing about a 
reorganization. This order was reversed subsequently 
on appeal. The bondholder's protective committee there- 
upon organized a corporation and conveyed title to the 
property to said corporation subject to the bonds. The 
newly-formed corporation filed a Petition for Reor- 
ganization under the then applicable Section 77B of the 
Bankruptcy Act. 

The Circuit Court's refusal to find bad faith in 
Knickerbocker is clearly distinguishable from the in- 
stant action. Thus, in Knickerbocker, the Petition was 
filed by a corporation organized by the holders of 98% 
of the bonds, who were actually the secured creditors 
who had become the owners of the property by bidding 
at the foreclosure sale. The state court had refused to 
approve the sale at the instance of a few of the remain- 
ing 2% holders of the bonds. In approving the or- 
ganization of the corporation and the filing of the 
Petition for Reorganization, the Circuit Court stated as 
follows : 

"We find that a large bond issue has been floated 
on corporate property; default made; foreclosure 
proceedings instituted in the state court; receiver 



—10— 

appointed by state court who went into possession 
and operated the property for more than five years 
prior to the petition herein ; a gross income of more 
than two and one-half million dollars collected; 
$85,000 paid to the receiver for his compensation; 
$31,500 paid to receiver's attorney; nothing paid 
to bondholders by way of principal or interest; 
taxes in the sum of $101,000 permitted to ac- 
cumulate and remain unpaid; value of property 
shrunk far below incumbrance. Finally a plan of 
reorganization was worked out which was satis- 
factory to 98 per cent of the bondholders who 
were the real owners of the property. The state 
courts being somewhat restricted in making ef- 
fective proposed reorganizations when confronted 
by minority opposition (see Chicago Title and 
Trust Co. V. Robin, 361 111. 261, 198 N.E. 4. 
Chicago Title and Trust Co. v. Bamburg, 361 
111. 291, 198 N.E. 10), it was deemed advisable to 
proceed with a foreclosure sale of the property 
which was bid in by the bondholders' committee. 
At the instance of a few of the 2 per cent, of non- 
assenting bondholders the state court declined to 
approve the sale, essayed by injunction to retain 
control, brought forth a fresh receiver, and entered 
upon the announced purpose of a further period of 
receivership operation. 

The bewildered bondholders were thus con- 
fronted with a condition and not a theory; they 
had invested their money in bonds of a corporation 
which had become insolvent through the crash of 
real estate values and other causes over which they 
had no control; they had honestly, as we believe. 



—11— 

taken various steps to bring about a fair adjust- 
ment of the unfortunate situation and had been 
thwarted in their purpose. Ninety-eight per cent, 
of them still had faith that a court of equity some- 
where, somehow, would deliver them from bondage. 

It is said that the purpose of Congress in the en- 
actment of sections 77A and 77B of the Bank- 
ruptcy Act (11 U.S.C.A. §§206, 207) was the 
creation of machinery for the relief of distressed 
corporate debtors, yet equally important are the 
provisions which prevent a minority group from 
defeating the worthy plan of a majority — in short 
it is designed to prevent a minority group from de- 
veloping a "nuisance" value far in excess of the 
actual value of their claims." 

In re Knickerbocker Hotel Co., 81 F. 2d 981, 984. 

The Court further stated that : 

"Stripped of the equities with which this case 
abounds, a different situation would, however, be 
presented." In re Knickerbocker Hotel Co., 81 F. 

2d 981, 985. 

* * * * 

"Courts of equity will not aid those who defraud or 
deceive, but search as we may the conduct of the 
bondholders throughout these proceedings we find 
nothing that would justify a court of equity in 
closing its doors to them. On the contrary, their 
unfortunate situation cries loudly for relief." In re 
Knickerbocker Hotel Co., 81 F. 2d 981, 985. 

Under such circumstances, the Knickerbocker case 
provides no solace for Appellees. Here we have two in- 
dividuals owning property and transferring it to a con- 



—12— 

trolled corporation solely to protect their own equity 
from a foreclosure sale scheduled by the secured credi- 
tors. In Knickerbocker, we had 98% of the secured 
creditors purchasing the property at a foreclosure sale 
and seeking court aid to prevent the remaining 2% 
from, as stated by the Circuit Court, "developing a 
'nuisance' value far in excess of the actual value of their 
claims" (at p. 984). 

Accordingly, Appellees do not and cannot dispute that 
the sole purpose of the transfer by Tavares and Kahn 
of the Sorrento Property to University City was to avail 
themselves of the injunctive power of the District Court 
so as to protect their individual equity in the Sorrento 
Property and to hinder, delay and prevent Appellant 
from proceeding with the noticed foreclosure sale under 
its deeds of trust. Under such circumstances, the trans- 
fer cannot be sanctioned. 

Milwaukee Postal Building Corp. v. McCami, 

95 F. 2d 948; 
In re North Kenmore Building Corp., 81 F. 2d 

656; 
Shapiro v. Wilgiis, 287 U. S. 348. 

VI. 

Conclusion. 

Appellant submits that the District Court erred in 
refusing to follow well-established precedents and 
that it erred in approving and adopting the Report of 
the Referee, the Findings of Fact and Conclusions of 
Law promulgated by the Referee. Appellant also sub- 
mits that the District Court erred, as a matter of law, 
in approving the Petition as having been filed in good 
faith since the only Order consistent with the evidence 
and established authorities is that the transfer by Kahn 



—13— 

and Tavares of the Sorrento Property to University 
City on the eve of f iUng the Petition for Reorganization 
solely to bring such property within the injunctive 
power of the District Court so as to restrain Appellant 
from proceeding with its foreclosure sales demonstrates 
such a lack of good faith to compel, as a matter of law, 
the dismissal of the instant reorganization proceedings. 
Such a dismissal is peculiarly appropriate here since the 
Board of Directors of University City acquiesced in the 
transfer with full knowledge of its intent and purpose. 

Accordingly, The Sixty Trust respectfully petitions 
the Court of Appeals for its judgment reversing the 
order of the District Court approving the Petition and 
directing the District Court to dismiss said Petition as 
not having been filed in good faith. 

Alternatively, The Sixty Trust respectfully petitions 
the Court of Appeals for its judgment reversing the 
District Court's approval of the Petition insofar as it 
relates to the Sorrento Property and directing that the 
Sorrento Property be segregated from the remaining 
assets of this estate, that the Order restraining the 
stay be vacated insofar as it relates to such property, 
and that Appellant herein be given leave to enforce its 
liens against said property and to foreclose its deeds of 
trust thereon in accordance with the terms thereof as 
authorized by the laws of the State of California. 

Respectfully submitted, 

Marsha K. McLean, 
Gibson, Dunn & Crutcher, 
Attorneys for Appellant, The 
Sixty Trust, 



NO. 2 2 8 3 
IN THE UNITED STATES COURT OF APPEALS 
FOR THE NINTH CIRCUIT 



JOHN LEGGETT, 



vs. 



Appellant, 



UNITED STATES OF AMERICA, 

Appellee. 



F i L-C- U 



'968 



r 6. LUCf' 



BRIEF OF APPELLEE 



APPEAL FROM 

THE UNITED STATES DISTRICT COURT 

FOR THE CENTRAL DISTRICT OF CALIFORNIA 



WM. MATTHEW BYRNE, JR., 

United States Attorney, 
ROBERT L. BROSIO. 

Assistant U. S. Attorney, 

Chief, Criminal Division, 
ALLAN B. STRELLER, 

Special Assistant U. S. Attorney, 

1200 U. S. Court House 
312 North Spring Street 
Los Angeles, California 90012 
688-2428 

Attorneys for Appellee, 
United States of America. 



-m5.i 



NO. 2 2 8 3 
IN THE UNITED STATES COURT OF APPEALS 
FOR THE NINTH CIRCUIT 



JOHN LEGGETT, 

Appellant, 
vs. 
UNITED STATES OF AMERICA, 

Appellee. 



BRIEF OF APPELLEE 



APPEAL FROM 

THE UNITED STATES DISTRICT COURT 

FOR THE CENTRAL DISTRICT OF CALIFORNIA 



WM. MATTHEW BYRNE, JR. , 

United States Attorney, 
ROBERT L. BROSIO, 

Assistant U. S. Attorney, 

Chief, Criminal Division, 
ALLAN B. STRELLER, 

Special Assistant U. S. Attorney, 

1200 U. S. Court House 
312 North Spring Street 
Los Angeles, California 90012 
688-2428 

Attorneys for Appellee, 
United States of America. 



TOPICAL INDEX 

Page 

Table of Authorities ii 

I JURISDICTIONAL STATEMENT 1 

II COUNTER STATEMENT OF THE FACTS 3 

III ARGUMENT 7 

THE EVIDENCE IS SUFFICIENT TO 

SUPPORT THE VERDICT. 7 

IV CONCLUSION 9 



^ 



TABLE OF AUTHORITIES 



Cases 



Page 



Diaz-Rosendo v. United States, 

357 F. 2d 124 (9th Cir. 1966) 8 

Glasser v. United States, 

314 U. S. 60 (1942) 8 

Lee V. United States, 

376 F. 2d 98 (9th Cir. 1967) 8 

Statutes 

Title 18 United States Code §2113 2 

Title 18 United States Code §21 13(a) 2 

Title 18 United States Code §2113(a)(d) 1 

Title 18 United States Code §3231 2 

Title 28 United States Code §1294(1) 2 

Rules 

Federal Rules of Criminal Procedure 

Rule 37(a) 2 



11. 



NO. 2 2 8 3 
IN THE UNITED STATES COURT OF APPEALS 
FOR THE NINTH CIRCUIT 



JOHN LEGGETT, 

Appellant, 
vs. 
UNITED STATES OF AMERICA, 

Appellee- 



BRIEF OF APPELLEE 



JURISDICTIONAL STATEMENT 

On December 27, 1967, the Federal Grand Jury for the 
Central District of California returned an indictment in one count 
charging John Leggett and Hosie McCloud with violation of Title 18, 
United States Code, Section 2113(a)(d). The indictment alleged that 
John Leggett and Hosie McCloud, knowingly and wilfully attempted 
to take money belonging to the Bank of America, 6951 Westminster 
Boulevard, Westminster, California and that in attempting to 
commit said offense, John Leggett and Hosie McCloud assaulted 
Arthur J. Schuker, Betty Buhrmester, and Mary Lemke 



[C. T. p. 2]. -/ 

On January 2, 1968, John Leggett and Hosie McCloud were 
arraigned and plead not guilty. 

On January 30, 1968, John Leggett and Hosie McCloud 
appeared before the Honorable Charles H. Carr, United States 
District Judge- Hosie McCloud was permitted to withdraw his plea 
of not guilty, and the Court accepted his plea of guilty to a violation 
of Title 18, United States Code, Section 2113(a) [R. T. pp. 3-5]. -/ 
John Leggett waived trial by jury [R. T. p. 16]. And on January 
30, 1968, a court trial before Judge Carr was begun and John 
Leggett was found guilty as charged on that day [R. T. p. 112]. 

On February 19, 1968, John Leggett and Hosie McCloud 
were sentenced to the custody of the Attorney General for a period 
of twenty (20) years [R. T. pp. 130-131]. On February 23, 1968, 
John Leggett filed a timely Notice of Appeal [C. T. p. 15]. 

Jurisdiction of the District Court was based on Title 18, 
United States Code, Sections 2113 and 3231. Jurisdiction of this 
Court is based on Title 28, United States Code, Section 1294(1) and 
Rule 37(a) of the Federal Rules of Criminal Procedure. 



1_/ "C. T. " refers to Clerk's Transcript. 

2_l "R. T. " refers to Reporter's Transcript. 

2. 



i 



II 

COUNTER STATEMENT OF THE FACTS 

On the morning of December 6, 1967, John Leggett, Hosie 
McCloud and Ivan Clark, also known as "Al" and also known as 
"Robert Smith", met at John Leggett's residence in Los Angeles, 
California. There, Ivan Clark told John Leggett and Hosie McCloud 
that he had a "job lined up". John Leggett, accompanied by Hosie 
McCloud in John Leggett's 1956 white Oldsmobile, drove to West- 
minster, California. Ivan Clark drove to Westminster, California 
in another car [R. T. pp. 65-66; pp. 77-80; pp. 82-83]. 

Somewhere in the vicinity of the Bank of America, _ ' 6951 
Westminster Blvd. , Westminster, California, _' John Leggett and 
Ivan Clark parked their respective cars. Ivan Clark told John 
Leggett and Hosie McCloud to wait for him and he left the area 
where the cars were parked on foot. Ivan Clark returned shortly 
thereafter and told John Leggett and Hosie McCloud that he had 
"cased" the place they intended to rob [R. T. pp. 65-67; pp. 84-85]. 

John Leggett, Hosie McCloud, and Ivan Clark drove past 
the bank in John Leggett's car several times, and on one occasion 
Ivan Clark directed attention to the bank [R. T. p. 67; pp. 86-87]. 
Subsequently, Ivan Clark and Hosie McCloud exited John Leggett's 



3_/ The deposits of the Bank of America, 6951 Westminster 

Blvd. , Westminster, California are insured by the Federal 
Deposit Insurance Corporation [R. T. pp. 19-20]. 

_4/ Hereinafter referred to as the bank. 

3. 



car (Clark in the parking lot of the bank and McCloud near the 
south entrance to the bank) and John Leggett parked his car near 
the bank's south entrance [R. T. pp. 35-36; p. 87]. 

As Hosie McCloud, wearing a mask, entered the bank 
through its south entrance, he bumped into Walter Hardy, a bank 
customer who was leaving the bank. After encountering Walter 
Hardy, Hosie McCloud walked away from the bank toward John 
Leggett's car in which John Leggett was seated. Ivan Clark, wear- 
ing a mask, entered the bank at its north entrance. He ordered the 
people in the bank to lie on the floor and fired several shots into the 
ceiling. Thereafter, Hosie McCloud, still wearing a mask, entered 
the bank [R. T. p. 22; p. 27; p. 31; pp. 35-36; p. 89]. When 
Arthur Shukar, the Bank Manager, attempted to set off a silent 
alarm, Ivan Clark pointed a gun at him and said "Hold it". Hosie 
McCloud jumped over one of the counters and ran behind the teller 
cages. Apparently Ivan Clark yelled "Time" and Hosie McCloud 
and Ivan Clark then exited the bank and entered John Leggett's car 
still masked [R. T. p. 23; p. 27; p. 31; pp. 38-40; p. 93]. 

Shortly thereafter, John Leggett and Hosie McCloud were 
arrested [R. T.. pp. 46-50]. John Leggett, after being fully advised 
of his constitutional rights, was interviewed by Federal Bureau of 
Investigation Agents, Francis A. Calley and Richard Cromwell 
[R. T. pp. 55-58]. Initially, John Leggett told the interviewing 
agents that he had driven to the city of Westminster in his 1956 
white Oldsmobile with Robert Smith, a friend, for the purpose of 
looking for a job; that they had stopped at a gas station; and while 

4. 



he (John Leggett) was in the restroom, Robert Smith disappeared 
with the 1956 white Oldsmobile; and that a short time thereafter he 
(John Leggett) and Hosie McCloud were arrested by officers of the 
Westminster Police Department [R. T. pp. 58-60]. 

John Leggett then recanted this story, and told the interview- 
ing agents that on the morning of December 6, 1967, Al(LNU) and 
Hosie McCloud came over to his apartment in Los Angeles; and that 
he (John Leggett) intended to go to Westminster in response to an ad- 
vertisement appearing in the newspaper for an automotive mechanic; 
that he and Hosie McCloud by arrangement met Al(LNU) in Westmin- 
ster; that Al(LNU) joined him and Hosie McCloud in his car; that Al 
(LNU) told him he had an account at the bank; that he drove Al(LNU) 
and Hosie McCloud to the bank; that Al(LNU) and Hosie McCloud 
entered the bank while he waited outside in his car; that a few min- 
utes later Al(LNU) and Hosie McCloud exited the bank and ran to his 
car; that Al(LNU) and Hosie McCloud told him to get away from the 
bank immediately; that he and Hosie McCloud parted company with 
Al(LNU) and then later he and Hosie McCloud were arrested by 
officers of the Westminster Police Department [R, T. pp. 60-63]. 

John Leggett recanted this story also and told the interview- 
ing agents that on the morning of December 6, 1967, Ivan Clark and 
Hosie McCloud met at his apartment in Los Angeles where the three 
of them discussed perpetrating a robbery in the city of Westminster; 
that subsequently, he and Hosie McCloud met Ivan Clark in West- 
minster; that the three of them drove by the bank in his car several 
times; that he parked outside the bank while Ivan Clark and Hosie 

5. 



McCloud entered the bank; and that a few moments later Ivan Clark 
and Hosie McCloud ran from the bank, entered the car and told him 
to leave the area immediately. In addition, John Leggett told the 
interviewing agents that he did not know that Ivan Clark and Hosie 
McCloud had entered the bank with the intent to rob it; that he did 
not see Ivan Clark and Hosie McCloud m possession of any masks 
or guns; and that when Ivan Clark and Hosie McCloud entered his 
car after exiting the bank, he was not aware that a robbery had been 
attempted [R. T. pp. 64-70]. 

At trial John Leggett denied having told the interviewing 
agents that he had gone to Westminster for the purpose of commit- 
ting a robbery and also denied that on the morning of December 6, 
1967, he had discussed with Al(LNU) and Hosie McCloud the com- 
mission of a robbery in the city of Westminster [R. T. pp. 98-100]. 

John Leggett further testified that he went to Westminster 
with Hosie McCloud to look for a job as a mechanic; that while he 
was attempting to locate the address of the mechanics shop he unex- 
pectedly met an acquaintance by the name of Robert Smith who 
agreed to show him where the mechanics shop was located; that 
Robert Smith asked him to stop at the bank before proceeding to the 
mechanics shop; that he drove Robert Smith and Hosie McCloud to 
the bank and waited outside while they entered the bank; that after 
Robert Smith and Hosie McCloud exited the bank they re-entered 
the car and drove away from the bank; and that at no time prior to 
the attempted bank robbery did he know that Robert Smith and Hosie 
McCloud intended to rob the bank [R. T. pp. 100-104]. 

6. 



Ill 

ARGUMENT 



THE EVIDENCE IS SUFFICIENT TO SUPPORT 

THE VERDICT 



John Leggett's sole contention is that the Government failed 
to adduce sufficient evidence to show that he was a knowing partici- 
pant in the attempted bank robbery. It is true that none of the 
witnesses percipient to the attempted robbery were able to identify 
John Leggett. Walter Hardy did testify that the fleeing robbers 
drove off in a white 1956 Oldsmobile [R. T. pp. 36-37]. There is 
no dispute that the white 1956 Oldsmobile was driven by John Leggett 
[R. T. p. 68; pp. 91-92; p. 103]. And there is no dispute that Ivan 
Clark exited John Leggett's car in the parking lot of the bank and 
that Hosie McCloud exited John Leggett's car near the south entrance 
to the bank wearing a mask and that when they (Clark and McCloud) 
re-entered John Leggett's car after exiting the bank they were 
masked [R. T. pp. 87-92]. 

It is submitted, on the basis of the foregoing evidence that 
reasonable minds could find beyond a reasonable doubt that John 
Leggett was a knowing participant in the attempted bank robbery. 
However, the Government's proof was not limited to this evidence. 
F. B. I. Agent Francis A. Galley testified that he interviewed John 
Leggett and that John Leggett, after relating two conflicting stories, 
admitted that: On the morning of December 6, 1967, he (John 
Leggett), Ivan Clark and Hosie McCloud discussed perpetrating a 

7. 



robbery in the city of Westminster; that the three of them drove by 
the bank in his car several times and on one occasion Ivan Clark 
pointed out the bank; that he parked outside the bank while Ivan 
Clark and Hosie McCloud entered the bank; and that a few moments 
later Ivan Clark and Hosie McCloud ran from the bank, entered the 
car and told him to leave the area immediately [R. T. pp. 55-70]. 

Further, Hosie McCloud, who was called by John Leggett, 
testified that on the morning of December 6, 1967, Ivan Clark dis- 
cussed with John Leggett perpetrating a bank robbery in the city of 
Westminster; that he (McCloud), John Leggett, and Ivan Clark, in 
John Leggett' s car with John Leggett driving, drove by the bank 
several times; that after Ivan Clark exited John Leggett' s car in the 
parking lot of the bank, he exited the car near the front of the bank; 
that he and Ivan Clark entered the bank wearing masks; that after 
exiting the bank, he and Ivan Clark re-entered John Leggett' s car 
still masked and John Leggett drove away from the bank [R. T. 
pp. 79-92]. 

The test of the sufficiency of evidence is whether reasonable 
minds could find that the evidence excludes every hypothesis but 
that of guilty. Lee v. United States , 376 F. 2d 98 (9th Cir. 1967). 
In applying this test the court must view the evidence in the light 
most favorable to the Government. Glasser v. United States, 314 
U. S. 60 (1942); Diaz-Rosendo v. United States , 357 F. 2d 124 
(9th Cir. 1966). It is respectfully submitted that the evidence 
meets this standard. 



8. 



IV 
CONCLUSION 

For the foregoing reasons, the judgment of conviction should 
be affirmed. 

Respectfully submitted, 

WM. MATTHEW BYRNE, JR., 
United States Attorney, 

ROBERT L. BROSIO, 

Assistant U. S. Attorney, 
Chief, Criminal Division, 

ALLAN B. STRELLER, 

Special Assistant U. S. Attorney, 

Attorneys for Appellee, 
United States of America. 



9. 



rnited States Court of Appeals 



NINTH CIRCUIT 



JLV ;op: 



UNITED STATES OF AMERICA, 

Appellee, 
vs. 
TERRY LAWRENCE WARD, 

Appellant. 



— No. 22731 



UNITED STATES OF AMERICA, 

Appellee, 
vs. 
ORLANDO LOUIE DURAN, 

Appellan t. 




— No, 22806 



''ILEO 



^Ui7 



APPELLANTS' SUPPLEMENTAL BRIEF 
REQUESTED BY THE COOIWI. B. 



f-^CK, 






ARTHUR LEWIS 
205 So. Broadway, Suite 802 
Of Counsel Los Angeles, California 900 1 2 

RUSSELL E. PARSONS HARVEY E. BYRON 

205 So. Broadway, Suite 400 403 So. Spring St., Suite 616 
Los Angeles, CaUfomia 90012 l^^ Angeles, California 90013 
Telephone -626-9167 

Attorneys for Appellants 



Offset printed by: Dean-Standefer Co., 315 3rd St., Huntington Beach 92646 

(714) 536-7161 



1 
TABLE OF AUTHORITIES CITED 

Cases Page 

Bruton v. United States, 391 U.S. 123 4, 5 

Covington v. United States (decided 

May 19, 1969 by the U.S.Supreme Court) . .2, 3, 4, 10 

Delli Paoli v. United States, 352 U.S. 232 4, 5 

Desist V. United States (Mar. 24, 1969) 

37 U.S. Law Week 4225 7, 8 

Doughty V. Maxwell, 376 U.S. 202 7 

Douglas V. CaUfomia, 372 U.S. 353 5 

Gideon v. Wainwright, 372 U.S. 335 5, 7 

Griffin v. California, 380 U.S. 609 6 

Griffin v. Illinois, 351 U.S. 12 7 

Hamilton v. Alabama, 368 U.S. 52 5 

Jackson v. Denno, 378 U.S. 368 7 

Johnsonv. New Jersey, 384 U.S. 719 8 

Katz V. United States, 389 U.S. 347 7 

Leary v. United States (decided 

May 19, 1969 by the U.S.Supreme Court) . . 
2, 3,4, 5,8, 9, 10 

Linkletterv. Walker, 381 U.S. 618 6,8 

Mapp V. Ohio, 367 U.S. 643 6, 7 

McNerUn v. Denno, 378 U.S. 575 7 



u 
TABLE OF AUTHORITIES CITED 

Cases (cont'd) Page 

People V. Tannenbaum, 244 N.E.2d 269 2 

Reck V. Pate, 367 U.S. 433 7 

Roberts v. Russell, 392 U.S. 293, 

20L.Ed.2d 1101 4,5 

Stovall V. Denno, 388 U.S. 293 6 

Tehan v. Shott, 382 U.S. 406 6, 8 

Tot V. United States, 319 U.S. 463 3 

Twining v. New Jersey, 21 1 U.S. 78 6 

United States v. Gainey, 380 U.S. 63 3 

United States v. Romano, 382 U.S. 136 3 

Statutes 

United States Constitution 

Fourth Amendment 7 

Fourteenth Amendment 6, 10 

21 U.S.C. 176a 2, 3, 4, 5, 9, 10 

26 U.S.C. 4744(a) 2 



IN THE 

UNITED STATES COURT OF APPEALS 

FOR THE NINTH CIRCUIT 



UNITED STATES OF AMERICA, 

Appellee, 



vs. 



_ No. 22731 



TERRY LAWRENCE WARD, 



Appellant. 



UNITED STATES OF AMERICA, 

Appellee, 



vs. 



ORLANDO LOUIE DURAN, 



Appellant. 



_ No. 22806 



APPELLANTS' SUPPLEMENTAL BRIEF 
REQUESTED BY THE COURT 



-2- 



In accordance with this Court's request, the appellants 
are submitting this supplemental brief with respect to the 
issue of the retroactivity of the cases of Lear y v. United States 
and Covington v. United States, decided May 19, 1969 by the 
United States Supreme Court, and whether such decisions can 
be applied to the cases of appellants. 

It is clear that in these cases the government relied wholly 
on the presumption set forth in Section 176a of Title 21, 
U.S.C., reading as follows: 

"Whenever on trial for a violation of this sub- 
section, the defendant is shown to have or to have 
had the marihuana in his possession, such possession 
shall be deemed sufficient evidence to authorize 
conviction unless the defendant explains his posses- 
sion to the satisfaction of the jury." 
In this brief we are only indirectly concerned with that 
portion of the Marijuana Tax Act embodied in 26 U.S.C. 
4744(a) which the Supreme Court held to be unconstitutional, 
and under which any conviction prior to the decision would 
have been void under the general rule as stated by the highest 
court of New York in People v. Tannenbaum, 244 N.E.2d 269, 
at 270, as follows: 

"Where a substantive criminal statute has been 
held unconstitutional, there is no alternative but to 
give the decision retroactive effect, for the declara- 
tion of unconstitutionality is a statement that the 
defendant has committed no crime. Were the defend- 
ant presently imprisoned, he would most certainly be 
entitled to habeas corpus relief." (Emphasis added.) 
Before discussing the issue of the retroactive or retrospec- 
tive operation of various Supreme Court decisions, let us first 



-3- 



examine Leary, since Covington was based entirely on Leary. 
It would appear from the Leary decision that the Court was 
applying earlier decisions with respect to presumptions con- 
tained in criminal statutes to the presumption contained in 
Section 176a. 

The Court relied on the rule in Tot v. United States, 
319 U.S. 463 (decided in 1943, many years before the instant 
cases), which rule was adhered to in United States v. Gainey 
(1965) 380 U.S. 63, and United States v. Romano (1965) 
382 U.S. 136. In Tot the Court held the presumption uncon- 
stitutional because there was no rational connection between 
the fact proved and the ultimate fact presumed. In Gainey 
the presumption was upheld because it "did no more than 
accord the evidence, if unexplained, its natural probative 
force" (380 U.S. at 71). In Romano the Court held invalid 
the presumption that the mere presence of the defendant at 
an illegal still authorized the jury to infer that he was in pos- 
session, custody or control of the still. 

Thus, we need not apply Leary retroactively in order to 
obtain a reversal of the conviction of the defendants, as the 
Court was basing its decision on previously announced rules. 
In fact, the Court stated: 

"We conclude that the 'knowledge' aspect 
of the 1 76a presumption cannot be upheld without 
making serious incisions into the teachings of Tot, 
Gainey and Romano. " 
In his concurring opinion, Mr. Justice Black contended 
the section was unconstitutional and stated: 

"Congress has no more constitutional power 
to tell a jury it can convict upon any such forced 
and baseless inference than it has power to tell 



-4- 



juries they can convict a defendant of a crime 
without any evidence at all from which an infer- 
ence of guilt could be drawn. See Thompson v. 
Louisville, 362 U.S. 199(1960)." 

Since the Court, in deciding Leary, relied upon rules it 
had announced in previous cases, decided long before the 
instant cases, we contend that this Court should do likewise 
and reverse the convictions without having to consider the 
issue of the retroactive operation oi Leary and Covington. 

If this Court is of the opinion that there is the issue of 
retroactivity, we submit that this is one of the instances in 
which the decision must be held to be retroactive so far as 
the invalidation of the section 176a presumption is concern- 
ed. Let us examine some of the cases wherein retroactive or 
retrospective application of the Supreme Court's decisions 
occurred. 

In Bruton v. United States, 391 U.S. 123, in the joint 
trial of two defendants, the confession of one was admitted 
but the jury was instructed to disregard it as to the co-defend- 
ant, in accordance with the rule oi Delli Paoli v. United States, 
352 U.S. 232. However, the Supreme Court overruled Delli 
Paoli and reversed the conviction, thus applying the new rule 
retroactively. 

In Roberts v. Russell, 392 U.S. 293, 20 L.Ed.2d 1101, 
a confession was introduced, made by one defendant, and the 
trial court instructed the jury to disregard it as against the 
petitioner [his co-defendant] as in Bruton, but petitioner was 
convicted. After the Tennessee Supreme Court affirmed his 
conviction, he petitioned in the federal court for habeas 
corpus. The court, relying on Delli Paoli, denied his petition 
and the Court of Appeals affirmed. The Supreme Court 



-5- 



reversed in the light oi Bruton, thus applying it retroactively 
to a collateral attack on the conviction. The Court stated: 
"We have . . . retroactively applied rules of 
criminal procedure fashioned to correct serious 
flaws in the fact-finding process at trial. [Citing 
many cases decided by the Supreme Court.] 
Despite cautionary instruction, the admission of 
a defendant's confession which implicates a co- 
defendant is such a serious flaw. The retroactivity 
of Bruton is therefore required; the 'error went to 
the basis of fair hearing and trial, because the pro- 
cedural apparatus never assured the [petitioner] 
a fair determination' of his guilt or innocence." 
Clearly, the above applies to the instant cases, as the 
"procedural apparatus" [i.e., the effect and consequences of 
the 21 U.S.C. 176a presumption] requires retroactive appli- 
cation oi Leary, if that be necessary. Moreover, the Court, 
in Russell, further stated that rehance on Delli Paoli was not 
persuasive, as attacks have been made upon it from its incep- 
tion. In a like manner, as in the instant cases, many attacks 
have been made on 176a and successful attacks on similar 
presumptions, as above noted. 
The Court further stated: 

"And even if the impact of retroactivity may 
be significant, the constitutional error presents a 
serious risk that the issue of guilt or innocence may 
not have been reliably determined." 
In Gideon v. Wainwright, 372 U.S. 335 [denial of counsel 
at trial] ; Hamilton v. Alabama, 368 U.S. 52 [denial of counsel 
at arraignment] ; and Douglas v. California, 372 U.S. 353 
[denial of appointment of counsel to indigent] , the decisions 



-6- 



of the Court were given retroactive operation, because, as 
stated in Stovall v. Denno, 388 U.S. 293, at 298: 

"We have also retroactively applied rules of 
criminal procedure to correct serious /7aw5 in the 
fact-finding process at trial." (Emphasis added.) 
In Linkletter v. Walker, 381 U.S. 618, and Tehan v. 
Shott, 382 U.S. 406, the decisions were given prospective 
operation as to cases final at the time, but the Court implied 
they nevertheless were applicable to cases still pending on 
direct review— as are the instant cases. 

In Tehan the Court, in support of its decision, stated 
at page 408: 

"All avenues of direct review of respondent's 
conviction were fully foreclosed more than a year 
before our decision in Malloy v. Hogan, supra [378 
U.S. 1 ] and almost two years before our decision 
in Griffin v. California, supra [380 U.S. 609-com- 
ment on failure of defendant to take stand] ." 
The Court further pointed out that these were state cases in 
which the state courts for 50 years had relied on Twining v. 
New Jersey, 21 1 U.S. 78, and to apply Griffin retroactively 
"would have an impact ... so devastating as to need no 
elaboration." 

This consideration is not present in the instant cases, 
not only because the states are not involved in new rules 
making them subject to the Amendments of the Constitution 
through the Fourteenth Amendment, but also because, herein, 
only a federal statute is involved. Furthermore, the cases 
herein are not final but are still open on direct appeal. 

In Linkletter it was held that the exclusionary rule of 
Mapp V. Ohio, 367 U.S. 643, should not be given retroactive 



effect because prior to Mapp such exclusionary rule did not 
exist for the states. The Court pointed out that in a number 
of cases it had applied rules retroactively, namely, in Gideon 
V. Wainwright, supra; Doughty v. Maxwell, 376 U.S. 202; and 
Griffin v. Illinois, 351 U.S. 12. It also applied retroactively 
the rules respecting coerced confessions, to v^it, Jackson v. 
Denno, 378 U.S. 368 [writ of habeas corpus granted] ; 
McNerlin v. Denno, 378 U.S. 575, WidReck v. Pate, 367 U.S. 
433 [coerced confession— /za^ea^ corpus granted] . 

In Katz V. United States, 389 U.S. 347, the Supreme 
Court, in reversing the conviction of petitioner, announced 
two new rules contrary to its line of earher decisions, to wit: 
(a) that the reach of the Fourth Amendment cannot turn upon 
the presence or absence of physical intrusions; and (b) that the 
Fourth Amendment protects persons as well as places. 

In Desist v. United States (Mar. 24, 1 969) 37 U.S. Law 
Week 4225, the Court held that the new rules announced in 
Katz, in which previous decisions of the Court were over- 
ruled, should be given only prospective apphcation. The 
Court stated: 

"While decisions before Katz may have re- 
flected growing dissatisfaction with the traditional 
tests of the constitutional vaUdity of electronic 
surveillance, the Court consistently reiterated 
those tests and declined invitations to abandon 
them." (Emphasis added.) 
The Court further pointed out that it had accorded only 
prospective operation to the exclusionary rule, because the 
exclusionary rule was but a procedural weapon that had no 
bearing on guilt and the fairness of the trial was not under 
attack. 



-8- 



The Court further stated that it had abandoned the 
approach in Linkletter and Tehan as to prospective applica- 
tion, in dtcidmg Johnson v. New Jersey, 384 U.S. 719, where- 
in it had stated at page 733: 

"... [O] ur holdings in Linkletter and Tehan 
were limited to convictions which had become final 
at the time Mapp and Griffin were rendered. Deci- 
sions prior to Linkletter and Tehan had already 
established without discussion that Mapp and 
Griffin applied to cases still on direct appeal at the 
time they were announced." 
Thus, in Desist, the Court's latest expression on the issue 
of retroactivity, it decided that prospective operation of a 
decision which overturned old established rules was apphcable 
only to those cases that were already final on appeal at the 
time of the decision. The instant cases are before this Court, 
and, not yet being final on appeal, the principle of prospective 
apphcation should not be apphed to them. 

In analyzing the cases above mentioned and others, includ- 
ing some of the concurring and dissenting opinions thereof, we 
beheve that certain principles underly the determination by the 
Supreme Court whether a particular decision should have retro- 
active or only prospective apphcation, and we briefly summar- 
ize them as follows: 

1 . Retroactive application must be given where the 
Court's decision seeks to correct serious flaws existing in the 
fact-finding process which deprive the defendant of a fair 
determination of his guilt or innocence. This is the situation 
in the instant cases, because the defendants' guilt or innocence 
had no rational connection with the ultimate fact presumed. 
Thus, retroactive apphcation must be given to Leary. 



2. Prospective application is given to decisions per- 
taining to new rules prohibiting the use of unlawfully obtain- 
ed evidence, because the new exclusionary rules are but pro- 
cedural weapons having no bearing on guilt and the fairness 
of the trial is not under attack. Primarily involved are the 
methods of pohce in the securing of evidence. 

3. Even in such cases where prospective application 
is determined, such prospective operation is applicable 
primarily— if not exclusively— to cases then final on appeal, 
especially in state cases. 

4. Prospective operation may occur when the new 
rules announced are contrary to a hne of decisions previously 
rendered by the Supreme Court, and in its latest decision it 
overrules the earlier decisions, which have been relied upon by 
police and courts in a great number of cases— especially in 
state cases. 

5. Where the particular decision nullifies and invali- 
dates a criminal statute (or a pertinent portion thereoO under 
which the defendant was convicted, the decision must be 
applied retroactively. This must be distinguished from those 
instances where the convictions take place due to the use of 
evidence previously authorized by court decisions, independ- 
ent of statutes. 

6. If there are decisions of the Supreme Court pre- 
viously rendered that portend, foreshadow, indicate or 
support the latest decision, the latter may be given retroactive 
effect. As the Court in Leary indicated, its decision was a 
clarification or extension of rules announced in previous cases 
wherein presumptions similar to that of 2 1 U.S.C. 1 76a were 
involved. 



-10- 
CONCLUSION 

In conclusion, we respectfully submit that the decisions 
in Leary and Covington should be applied to the instant cases, 
and the judgments of conviction reversed, for the following 
reasons, among others: 

1. The presumption under 21 U.S.C. 176a constituted 
a serious flaw in the fact-finding process, because the presump- 
tion has no rational connection with the determination of the 
guilt of defendants. In fact, Mr. Justice Black in his concur- 
ring opinion in Leary stated it was unconstitutional. 

2. The Supreme Court in deciding Leary did not have 
to overrule any previous decisions by it on the subject; it 
merely extended to 21 U.S.C. 176a its rulings in previous 
cases where similar presumptions were involved. Thus, there 
had been no period of reliance on previously announced rules 
by the Supreme Court. 

3. Leary did not involve any exclusionary rules or 
rules of police administration and methods, made applicable 
to the states under the Amendments of the Constitution via 
the Fourteenth Amendment. 

4. The instant cases are not final, being still open on 
appeal, and hence Leary is applicable to them, since most 
cases of prospective operation have been limited to cases 
already final on appeal, especially state cases. 

Therefore, we urge that this Court reverse the convic- 
tions of appellants. 

Respectfully submitted, 

ARTHUR LEWIS and 

HARVEY E. BYRON 
RUSSELL E. PARSONS 

Of Counsel A ttorneys for Appellants 



DECLARATION OF SERVICE BY MAIL 

STATE OF CALIFORNIA ) 

) ss. 
County of Orange ) 

I, the undersigned, say: I am and was at all times herein mentioned, a citizen of 
the United States and employed in the County of Orange, over the age of eighteen 
years and not a party to the within action or proceeding; that 

My business address is 315 Third Street, Huntington Beach, CaUfomia 92646, 
that on JULY , 1 969, 1 served the within APPELLANTS' SUPPLEMENTAL 
BRIEF REQUESTED BY THE COURT (CASE NO. 22731 and CASE NO. 22806) 
on the following named party by depositing three copies thereof, enclosed in a 
sealed envelope with postage thereon fully prepaid, in the United States Post Office 
in the City of Huntington Beach, California, addressed to said party at the address 
as follows: 

UNITED STATES ATTORNEY 
UNITED STATES COURTHOUSE 
312 NORTH SPRING STREET 
LOS ANGELES, CALIFORNIA 90012 

I declare under penalty of perjury that the foregoing is true and correct. 

Executed on JULY , 1969, at HUNTINGTON BEACH, CALIFORNIA. 



D. A. Standefer 

25 COPIES TO: 

CLERK, UNITED STATES COURT OF APPEALS 

NINTH CIRCUIT 

U. S. COURT OF APPEALS & COURTHOUSE BLDG. 

SEVENTH & MISSION STREETS 

SAN FRANCISCO, CALIFORNIA 94101 



Dean-Standefer Co., 315 3rd St., Huntington Beach 92646 

(714) 536-7161 



&!'■, : 



NO. 2 2 8 6 

IN THE UNITED STATES COURT OF Ai 
FOR THE NINTH CIRCUIT 

ORLANDO L. DURAN, 

Appellant, 
vs, 
I .NiiED STATES OF AMERICA, 

Appellee. 

APPELLEE'S BRIEF 



F5Li 

cr-n r. iggp 



APPEAL FROM 

THE . i.ITED STATES DISTRICT COURT 

FOR THE CENTRAL DISTRICT OF CALIFORNIA 



WM. MATTHEW BYRNE, JR. 
United States Attorney 

ROBERT L. BROSIO 

Assistant U. S. Attorney 
Chief, Criminal Division 

MICHAEL D. NASATIR 
Assistant U. S. Attorney 

1200 U. S. Court House 

312 North Spring Street 

Los Angeles, California 90012 

688-2417 

Attorneys for Appellee, 
United States of Ame: 



'S^: 



mm 



NO. 2 2 8 6 
IN THE UNITED STATES COURT OF APPEALS 
FOR THE NINTH CIRCUIT 

ORLANDO L. DURAN, 

Appellant, 
vs. 
UNITED STATES OF AMERICA, 

Appellee. 



APPELLEE'S BRIEF 



APPEAL FROM 

THE UNITED STATES DISTRICT COURT 

FOR THE CENTRAL DISTRICT OF CALIFORNIA 



WM. MATTHEW BYRNE, JR. 
United States Attorney 

ROBERT L. BROSIO 

Assistant U. S. Attorney 
Chief, Criminal Division 

MICHAEL D. NASATIR 

Assistant U. S. Attorney 

1200 U. S. Court House 

312 North Spring Street 

Los Angeles, California 90012 

688-2417 

Attorneys for Appellee, 
United States of America 



TOPICAL INDEX 

Page 
Table of Authorities. ii 

I STATUTE INVOLVED. 1 

II STATEMENT OF THE CASE. 2 

III A. THE EVIDENCE IS SUFFICIENT 

TO SHOW THAT DURAN WAS 
IN POSSESSION OF THE MARI- 
HUANA CHARGED IN COUNT I 
OF THE INDICTMENT. 4 

B. THE EVIDENCE IS SUFFICIENT 

TO SHOW THAT DURAN WAS IN 
POSSESSION OF THE MARIHUANA 
CHARGED IN COUNT II OF THE 
INDICTMENT. 6 

CONCLUSION. 8 



TABLE OF AUTHORITIES 



Cases 



Page 



Cellino v. United States, 

276 F. 2d 941 (9th Cir. 1960) 5, 8 

Delgado v. United States, 

327 F. 2d 641 (9th Cir. 1964) 6 

Dolliver v. United States, 

379 F. 2d 307 (9th Cir. 1967) 5 

Evans v. United States, 

257 F. 2d 121 (9th Cir. 1958) 7 

Fraker v. United States, 

294 F. 2d 859 (9th Cir. 1961) 8 

Klepper v. United States, 

331 F. 2d 694 (9th Cir. 1964) 7 

Rodello V. United States, 

286 F. 2d 306 (9th Cir. 1960), 

cert, denied 365 U.S. 889(1961) 5, 8 

Statute 

Title 21 United States Code, §176(a) 1, 4, 5 



11 



NO. 2 2806 
IN THE UNITED STATES COURT OF APPEALS 
FOR THE NINTH CIRCUIT 

ORLANDO L. DURAN, 

Appellant, 
vs. 
UNITED STATES OF AMERICA, 

Appellee. 



APPELLEE'S BRIEF 

I 

STATUTE INVOLVED 

Title 21, United States Code, Section 176(a), provides 
in pertinent part as follows: 

". . . whoever, knowingly, with intent to 
defraud the United States, . . . receives, con- 
ceals, buys, sells, or in any manner facilitates 
the transportation, or sale of such marihuana after 
being imported or brought in, knowing the same to 
have been imported or brought into the United 
States contrary to law . . . shall be imprisoned 
not less than five or more than twenty years and, 
in addition, may be fined not more than $20, 000. 

1. 



[R. T. 46]. Defendant Duran told Lusardi that the kilos in the 
garage were wrapped differently because they had opened them 
up to ascertain whether the marihuana had been either "sugared 
or honeyed down" [R. T. 46]. Defendant Duran then unlocked 
and opened the garage door [R. T. 46, 7 0]. In the garage Agent 
Lusardi examined a box containing approximately 14 kilograms 
of marihuana. He then told defendants Ward and Duran he was 
satisfied and would get his partner and load the marihuana into 
his vehicle [R. T. 46]. 

Agent Lusardi and Miser then returned to the government 
car. Agent Lusardi told Agent Walker he had seen the marihuana 
and told him to drive to the backyard. Agent Walker drove up 
the driveway where defendant Duran instructed him to back his 
car next to the Volkswagen and to shut off the lights of his 
vehicle [R. T. 79]. Agent Lusardi then placed Miser under 
arrest, while Agent Walker placed defendant Duran and defendant 
Ward under arrest [R. T. 47-48, 60-62, 79]. 



Ill 

A. THE EVIDENCE IS SUFFICIENT TO 

SHOW THAT DURAN WAS IN POSSESSION 
OF THE MARIHUANA CHARGED IN 
COUNT I OF THE INDICTMENT. 



Section 17 6(a), Title 21, United States Code, provides 
that proof of possession of marihuana is sufficient evidence to 
authorize conviction unless that possession is explained to 



4. 



the satisfaction of the jury. 

"Possession" sufficient to support the inference of 
importantion and knowledge provided in Section 176(a) of Title 21, 
United States Code, means having marihuana under one 's 
dominion and control to such a degree as to have the power of 
disposal. Such possession can be constructive and need not 
be exclusive, but may be joint. 

Rodella v. United States, 286 F. 2d 306, 311 

(9 Cir. 1960), cert, den. 365 U. S. 889(1961); 
Dolliver v. United States, 37 9 F. 2d 307 
(9th Cir. 1967). 
Actual or constructive possession may be proved by 
circumstantial evidence. 

Cellino v. United States, 276 F. 2d 941 
(9th Cir. 1960). 
Whether or not defendant Duran spoke to Agent Lusardi at 
the outset of the negotiations, it is clear from the evidence that 
defendant Duran had joint dominion and control over the marihuana 
in the trunk of the Volkswagen which is the subject of Count I. 
After Agent Lusardi went to the backyard with defendants Duran 
and Ward, defendant Duran told defendant Ward to open the trunk 
of the Volkswagen to show Agent Lusardi the marihuana [R. T. 45]. 
Defendant Ward complied [R. T. 45]. 

As Lusardi was examining the marihuana, defendant Duran 
told the agent that if he wanted to take a closer look at the 
marihuana he could take several kilos into the house to look at 

5. 



them in the light [R. T. 45]. He also stated that there were 46 
kilos in the trunk [R. T. 45-46]. 

The above evidence shows that Duran had knowledge of 
the location of the marihuana in the car and a knowledge of the 
precise amount. Also apparent is his desire and ability to 
facilitate the sale of it. The instruction to defendant Ward and 
defendant Ward's compliance with those instructions further show 
dominion and control over the contraband. It also must be 
pointed out that near the end of the entire transaction Duran 
instructed Agent Walker to back his car next to the Volkswagen, 
presumably to effect a transfer of the 46 kilos from Ward's car 
to the agent's [R. T. 7 9]. 

Appellant religes on Delgado v. United States, 327 F. 2d 
641 (9th Cir. 1964). However, in Delgado there was no evidence 
presented other than the fact that marihuana was found in the 
drawer of a nightstand at the foot of a bed occupied by the 
defendants. In this case, defendant Duran's statements 
establish his joint dominion and control. 



B. THE EVIDENCE IS SUFFICIENT TO 

SHOW THAT DURAN WAS IN POSSESSION 
OF THE MARIHUANA CHARGED IN 
COUNT II OF THE INDICTMENT. 



After Agent Lusardi had seen the marihuana in the trunk 
of the car, defendant Duran told Lusardi there were 46 kilos of 
marihuana in the car and 14 more in the garage [R. T. 45-46]. 



6. 



The latter 14 kilos are the subject of Count II of the indictment 
[R. T. 47]. Defendant Ward told defendant Duran to open the 
garage. Defendant Duran then went to the garage, unlocked the 
door with a key from his key ring, and opened the garage door 
to show Agent Lusardi the marihuana. At this time Duran told 
Lusardi that the kilos in the garage were wrapped differently 
because they had previously been opened in order to ascertain 
whether the marihuana had been "sugared or honeyed down" 
[R. T. 46]. 

The fact that Duran gained access to the garage with his 
key indicates that he had control over that area. 

"Proof that one had exclusive control and 
dominion over property on or in which contraband 
narcotics are found is a potent circumstance 
tending to prove knowledge of the presence of such 
narcotics and control thereof. " 

Evans v. United States, 257 F. 2d 121, 128 
(9th Cir. 1958). 
His statements to the agent further indicate that he had 
detailed knowledge of the quantity and quality of the marihuana 
by reason of his previous examination of it. Certainly reasonable 
minds could also conclude that he had the desire and power to 
dispose of it. 

Klepper v. United States, 331 F. 2d 694 
(9th Cir. 1964); 



7. 



Rodella, supra , at p. 31; 
Cellino, supra. 

CONCLUSION 

From the foregoing facts it can be seen that there was 
ample evidence, taking the view most favorable to the govern- 
ment, for reasonable minds to conclude that defendant was in 
possession of the marihuana involved in both counts. Therefore, 
the verdict of the jury as the sole triers of fact must be sustained. 
Fraker v . United States, 294 F. 2d 859 
(9th Cir. 1961). 

Respectfully submitted, 

WM. MATTHEW BYRNE, JR. 
United States Attorney 

ROBERT L. BROSIO 

Assistant U. S. Attorney 
Chief, Criminal Division 

MICHAEL D. NASATIR 

Assistant U. S. Attorney 

Attorneys for Appellee, 
United States of America. 



8. 



XV THE 
tmiTED STATES CCXIBT OP SPVEALB 
PGR THE HXBTTH CXBCDZT 



tmXTBD StIkTBS 


OP AMERICA, ) 






# 


«•• 














JMpp«II«ttt« ) 


UHITED SlS^insS 


} 

OP AfOSRICUl, ) 

t 








VS. 






ORIAHDO LOUZB 


DOBMI, 


Ai^MlIatBt* ) 



MAR 10;9?9 



Mo. 22,731 



90. 22,806 



PETZTZOS rOR SHEEBARXSO 



ILED 



DEC 2 3 1968 



ARIHUa LEVIS 

205 south Broadway, Suit* 802 

Los Ab9«1mi, California 90012 

624-4901 

BIkRVZy E. BSTBOV 

403 Soutb Spriz>9 Straat, Suite 616 

Los A&galas, California 90012 

629*14d6 



Attorneys for Appellants 





«". o. LUCK, X^CER 




1 

2 

3 
4 
6 
6 
7 
8 
9 
10 
13 
12 
L3 
14 
15 
16 

17 
18 

19 
20 
21 

22 

23 
24 
25 
26 



UNITED STATES COURT OF APPEALS 
FOR THE NINTH CIRCUIT 



UNITED STATES OF 7\MERICA, 



Appellee, 



vs . 



TERRY LAWRENCE WARD, 



Appellant. 



UNITED STATES OF AMERICA, 



Appellee, 



vs . 



ORLANDO LOUIE DUR7\N, 



Appellant 



No. 22,731 



No. 22,806 



PETITION FOR REHEARING 

Appellants herein petition this Court for a rehearing 
and reconsideration of the judgment of the Court entered on or 
about November 29, 1968, on the ground that significant Consti- ' 
tutional questions were not adequately considered. 



' 



In this regard Appellants respectfully direct this 
Court's attention to the order of the United States Supreme 
Court of June 10, 1968, granting Certiorari in the matter of 
Ii^DL_'Z5ji_Ullit5i3 States. 



-1- 



-yir 



""• »• LUCK. CLERK 



Certiorari therein was granted, limited to Questions 
I and IV, presented by the petition therein which read as 
follows: 

"I. Whether the registration and tax provisions 
in 26 U.S.C. Sections 4741(a), 4742 and 4744(a), 
as applied to Petitioner, violate his privilege 
against self incrimination protected by the Fifth 
Amendment to the United States Constitution and 
his rights thereunder as amplified by this Court 
in three recently decided cases: Marchetti v. 
U.S. , 390 U.S. 39 (1968); Grosso v. U.S. , 390 
U.S. 62 (1968): and Haynes v. U.S. , 390 U.S. 85 
(1968)." 

"IV. Whether Petitioner was denied due process 
under the Fifth Amendment by the application, 
under the circumstances of this case, of the 
provisions of 21 U.S.C, § 176a, providing that 
an inference may be drawn respecting the illegal 
origin and nature of marihuana solely from : 

possession thereof. " ; 

In view of the consideration by the United States j 

Supreme Court of these vital Constitutional issues which are j 

t 
also present in the instant case, Appellants herein respect- j 

fully request this Honorable Court to stay the mandate herein j 



-2- 




•****wHJMMl^ 



WM- 8. LOCK, c..t. 



\l\ 



1 

2 
3 
4 
5 
6 

7 

8 

9 

10 
11 
12 
13 
14 
15 
16 

17 
18 

19 
20 
21 
22 
23 
24 
25 
28 



pending decision of the matter by the United States Supreme 
Court. 

Respectfully submitted, 

'^ 






Harvey/Byron 

Attorney for/Appellant, Terry 

Lawrence Ward 




Arthur Lewis 

Attorney for Appellant, Orlando 

Louie Duran 



-3- 



^I^^^TOCK. CLERK 



1 

2 
3 

4 
5 
6 
7 
8 
9 

10 
11 
12 
13 
14 
15 
16 

17 
18 

19 
20 
21 
22 
23 
24 
25 
26 



AFFIDAVIT OF SERVICE BY MAIL 



S'l'A'n', C)V CAl.ThTjRN TA 



) 

) ss 



COUNTY OF LOS ANGELES ) 

I, MARIA ADELINA PERIZ, declare: 

I am a citizen of the United States, over 18 years of 
age, and not a party to the within cause; my business address 
is 205 South Broadway, Suite 802, Los Angeles, California 90012 
On December 17, 1968, I served a copy of the attached PETITION 
FOR RFUEARING on each of the following by placing same in an 
envelope addressed, respectively, as follows: 



Michael D. Nasatir 

12 00 U.S, Court House 

312 North Spring Street 

Los Angeles, California 90012 



William Matthew Byrne 

1200 U.S. Court House 

312 North Spring Street 

Los Angeles, California 90012 

United Stabes Court of Appeals 

Ninth Circuit 

P. O, Box 547 

San Francisco, California 94101 

Attention: William B. Luck 



Each of said envelopes was then, on December 17, 1968 
sealed and deposited in the United States Mail at Los Angeles, 
California, the county in which I am employed, with postage 
thereon fully prepaid. 



/hoM Qddir^flM^ 



MARIA ADELINA PEREZ 



Subscribed and sworn!to before me 
this 17th day of December, 1968. 




?y Pu'b^^c in and for said 
County and State 




n I ••■*«»«»■■*'■'"'<>'' " 



OFFICIAL SEAL 

\ ELIZABETH J. TURNER 

''] NOTARY rUDLIC CALIFORNIA 
PRINCIPAL OFFICE IN 
LOS ANGELES COUNTY 

My Commission Expires August 25, 1972 



"4- 



I 



%wm\mtmmvt^mmnmif¥f*^^<^ 1 ■*''•*: ^'^-^^i 



WW. H LIJCK. CLERK 



\ngM|.AM)nrSWr ' 



UNITED STATES COURT OP APPEALS 
FOR THE NINTH CIRCUIT 



CAROL J. WINTHAL, 
MARTIN J. WINTHAL, 






Appe 


Hants, ) 




vs. 




MANLEY 


BOWLER, 






Appe 


llee, ) 



APR 2 1969 



No. 22808 



/ 



APPELLEE'S BRIEF 



THOMAS C. LYNCH, Attorney 
General of California 

JOHN T. MURPHY 

Deputy Attorney General 

KARL S. MAYER 

Deputy Attorney General 

6000 State Building 

San Francisco, California 

Telephone: 557-1851 

Attorneys for Appellee 



FILED 

MAR 2 ? 1969 
WM. B. LUCK. CLERK 



TOPICAL INDEX 



JURISDICTION 1 

STATEMENT OP THE CASE 1 

STATEMENT OF FACTS 2 

Preliminary Statement 2 

ISSUES PRESENTED FOR REVIEW 4 

ARGUMENT 

I. APPELLANTS HAVE NEVER STATED JUSTIFICATION 
FOR ENJOINING THE ADULT AUTHORITY FROM 
ENFORCING CALIFORNIA'S INDETERMINATE 
SENTENCE LAW IN EXERCISE OF THE AUTHORITY 
DELEGATED IT BY THE LEGISLATURE. 4 

II. THE MEMBERS OF THE CALIFORNIA ADULT 
AUTHORITY ARE NOT SUBJECT TO A SUIT 
FOR DAMAGES UNDER THE FEDERAL CIVIL 
RIGHTS ACT FOR ACTS DONE IN THEIR 
OFFICIAL CAPACITY. 6 

CONCLUSION 7 



1. 



'" rlTiJ/'JT. 






1,1 .. 






':■ < 



^'. 



''^■]: 



TABLE OF CASES 



» 



Page 



Bennett v. California, 

P. 2d (9th Clr. I969), 

No. 21952, decided January 9, 1969 4, 6 

Clark V. Washington, 

366 P. 2d 681 (9th Clr. I966) .6 

Davis V, Maryland, 

248 P.Supp. 951 (W.Dis. Md. I965) 5 

DeWitt V. Pail, 

366 P. 2d 682 (9th Cir. I966) 5 

Dreyer v, Illinois, 

187 U.S. 71 (1902) H 



Dunn V. California Department of Corrections 

401 P. 2d 340 (9th Cir. I968) ' 5, 6 



Eason v. Dickson, 

390 P. 2d 585 (9th Cir. I968) 6 

Gaito V. Strauss, 

368 P. 2d 787 (3rd Cir. I966), 

cert. denied 386 U.S. 977 (1967) 5 

In re Hall, 

63 Cal.2d 115 (1965) 5 

Johnson v. Walker, 

317 P. 2d 418 (5th Cir. 1963) 5 

Mempa v. Rhay. 

389 U.S. 128 (1967) 6 

Silver v. Dickson, 

P. 2d (9th Cir. I968), 

W7 22129, decided November 8, I968 6 

Sires v. Cole, 

320 P. 2d 877 (9th Cir. I963) 6 



ii. 



) V". 



r-t 



«i !■ 



i . :; 



TEXTS > STATUTES AND AUTHORITIES 

Page 

United States Code 

Title 28, § 1291 1 

Title 28, § 1343 1 

Title 28, § 2254 5 

Title 42, §§ 1981 et seq. 1 



Federal Rules of Appellate Procedure 
Rule 28 



Federal Rules of Civil Procedure 
Rule 8a 



iii. 



■^ ■'><■, 



i 



UNITED STATES COURT OP APPEALS 
FOR THE NINTH CIRCUIT 



CAROL J. WINTHAL, 
MARTIN J. WINTHAL, 






Appe 


Hants, ) 




vs. 




MANLEY 


BOWLER, 






Appe 


llee. ) 



No. 22808 



APPELLEE'S BRIEF 



JURISDICTION 

The Jurisdiction of the United States District Court 
for the Northern District of California to entertain appellants' 
complaint was conferred by Title 42, United States Code sections 
1981 et seq., and Title 28, United States Code section 13^3. The 
Jurisdiction of this Court is conferred by Title 28, United States 
Code section 1291. 

STATEMENT OF THE CASE 

This is an appeal from the February 28, I968 order of 
the District Court which (1) denied Martin Winthal's motion to 
enjoin the California Adult Authority from taking further actions 
with regard to him and (2) dismissed the action as to the defendant 
Manley Bowler, a member of the California Adult Authority. Ap- 
pellants' first papers in this case were filed May 9, 1967 and 

1. 






••■•iO 



.1 ' -i' .it ; 






■ F>J- 



dismissed October 6, 196? by the District Court under Rule 8a 
Federal Rules of Civil Procedure, with leave to file an amended 
complaint , 

Early in December, 1967, appellants filed an amended 
complaint and an application for an injunction against the 
California Adult Authority. On December 13, 1967 the District 
Court issued an order to the defendants to show cause on Janu- 
ary 19, 1968 why a permanent injunction should not issue. On 
January 11, I968 the defendants Bowler and the California Adult 
Authority filed a return to the order to show cause and on 
January I8, 1968 plaintiffs filed a traverse. The matter was 
argued and submitted January 19, 1968. 

On February 8, I968 Manley Bowler noticed a motion 
to dismiss the action as to himself which was argued and sub- 
mitted. 

On February 28, I968 the District Court denied the 
injunction against the California Adult Authority and discharged 
its order to shov7 cause and also granted Bov/ler's motion to 
dismiss the action. This is the order appealed from. 

STATEMENT OF FACTS 
Preliminary Statement 

It would appear unnecessary for appellee to set forth 
a statement of facts since appellants have declined to do so in 
the Opening Brief. These circumstances ordinarily would call 
for a motion before this Court to strike Appellants' Opening 
Brief by reason of its failure to have complied with Rule 28, 
Federal Rules of Appellate Procedure. Experience teaches, 

2. 



'•nr 



. J •* 



1 



I 



however, that little would be accomplished by such a motion in 
view of appellants' having consistently filed papers, both in 
the District Court and in this Court, which are virtually in- 
comprehensible." 

Accordingly, we set forth here no detailed statement 
of facts because the issues and discussion set forth in Appellants' 
Opening Brief do not require it. Each of the matters raised in 
the Opening Brief have been well settled by the opinions of 
this Court contrary to appellants' position. We also point out 
here that, of course, this brief is not addressed to the following 
points in Appellants' Opening Brief which relate exclusively to 
the federal defendants: 

A, Under "Questions Involved" we do not address ourselves 
to paragraph numbered four (Appellants' Opening Brief, 
p. 3). 

B, Under "Specifications of Error" we do not address 
ourselves to paragraph numbered three (Appellants' 
Opening Brief, p. H), 

C, Under "Argument" we do not address ourselves to 
paragraph numbered six (Appellants' Opening Brief, 

1. Our Return to the Order to Show Cause and Points and 
Authorities in Opposition to the Petition for Permanent Injunction, 
filed in the District Court July 11, 1968, sets forth our under- 
standing and our detailed response to appellants' application for 
the injunction. Similarly, our Points and Authorities in Support 
of the Motion to Dismiss as to Manley Bowler contains our under- 
standing of the amended Complaint and our detailed response to 
it. In view of the nature of Appellants' Opening Brief, however, 
we decline to go into this material, the discussion of which would 
be mainly repetitive of the above documents which are already part 
of the record on appeal. 

3. 



■''.' i -t. 



pp. 7 and 8). 

ISSUES PRESENTED FOR REVIEW 

1. Whether the federal District Court may enjoin the 
California Adult Authority from enforcing California's Indetermin- 
ate Sentence Law under the authority delegated it by the Legis- 
lature. 

2. Whether the members of the California Adult Authoritj 
are individually liable under the Civil Rights Act for acts done 

in their official capacity. 

3. Whether California's Indeterminate Sentence Law is 
unconstitutional. 

ARGUMENT 

I 

APPELLANTS HAVE NEVER STATED JUSTIFICATION 
FOR ENJOINING THE ADULT AUTHORITY FROM 
ENFORCING CALIFORNIA'S INDETERMINATE 
SENTENCE LAW IN EXERCISE OF THE AUTHORITY 
DELEGATED IT BY THE LEGISLATURE. 

The first and third issues as set forth above are 
inextricably bound together. California's Indeterminate 
Sentence Law is indisputably valid under the United States 
Constitution as is the delegation of power to fix and refix 
terms and grant and revoke parole. Dreyer v. Illinois , l87 

U.S. 71, 83, 84 (1902); Bennett v. California , F.2d 

(9th Cir. 1969) (No. 21,952, decided January 9, 1969, and the 
cases there cited). Accordingly, such conduct of the California 
Adult Authority may not be enjoined for the simple reason it 
is not invalid under federal law. 

Where a state prisoner attacks the revocation of his 



a.- 



l'^ 



■^f. M -.^ .5, 



iV>' 



parole on federal constitutional grounds, a remedy must be sought 
by way of a petition for writ of habeas corpus. Cf. Dunn v. 
California Department of Corrections , 401 F.2d 3^0, 342 (9th 
Cir. 1968). Neither this Court nor the District Court may grant 
him relief in this action because to do so would be to treat the 
Instant action as one for a writ of habeas corpus; such writ 
could not properly issue because Martin Winthal's custodian is 
not a party to the action. See Gaito v. Strauss , 368 F.2d 787, 
788 (3rd Cir. 1966), cert, denied , 386 U.S. 977 (1967). This 
Court has held that an action under the Civil Rights statutes 
may not be used as a substitute for habeas corpus. DeWitt v. 
Pail , 366 F.2d 682 (9th Cir. I966). This is particularly true 
where to use a civil rights action as a substitute for habeas 
corpus would operate to allow the plaintiff to avoid the exhaust- 
ion of state remedies requirements of Title 28, United States Code 
section 2254. Johnson v. Walker , 317 F.2d 4l8, 419-20 (5th Cir. 
1963); Davis v. Maryland , 248 F.Supp. 951, 952-53 (W.Dis. Md. 
1965). Such a remedy is presently available upon proper grounds 
under California state law which provides a means to determine 

whether parole has been improperly revoked. See, e.g.. In re Hall , 

2/ 
63 Cal.2d 115 (1965). 

Appellants also failed to set forth any justification 



2. It should be noted here that in Civil Action No. 45793 
in the files of the United States District Court for the Northern 
District of California, Martin Winthal unsuccessfully petitioned 
for a writ of habeas corpus on the grounds that his state court 
convictions are invalid. This petition was dismissed by order 
of the court signed November 9, 1966 by Chief Justice Harris on 
the ground that Winthal had failed to comply with Title 28, 
United States Code section 2254. 

5. 



>'i --.-'i/? 



4 » 



zi* VCVi 



3 f '. )• •".'" 



i-W V'J 



. <. 



for enjoining the California Adult Authority from acting in 

Martin Winthal's case on the grounds that he need not be permitted 

counsel at a parole revocation hearing, and indeed need not be 

given the opportunity to appear at all. The rights granted a 

criminal defendant at a probation hearing under Mempa v. Rhay 389 

U.S. 128 (1967), are inapplicable to state parole revocation 

hearings. This point has been expressly decided by this Court 

in Dunn v. California Department of Corrections » 401 P. 2d 3^10, 3^12 

(9th Cir. 1968) and in Eason v. Dickson, 390 F.2d 585, 588-89 (9th 

Cir. 1968). 

II 

THE MEMBERS OP THE CALIPORNIA ADULT 
AUTHORITY ARE NOT SUBJECT TO A SUIT 
POR DAMAGES UNDER THE FEDERAL CIVIL 
RIGHTS ACT POR ACTS DONE IN THEIR 
OFFICIAL CAPACITY, 

It is well settled that state agencies such as the 

California Adult Authority are not "persons" within the meaning 

of the Civil Rights Act. Bennett v. California , supra ; Clark 

V. Washington , 366 P. 2d 68I (9th Cir, I966); Sires v. Cole , 

320 F.2d 877, 879 (9th Cir. I963). The actions of Manley Bowler 

of which Martin Winthal complains fall within the quasi-Judicial 

or discretionary duties and functions vested in him by state 

law and are alleged to have been taken in his official capacity. 

As to such actions, it is well settled by the decisions of this 

Court that the members of the Adult Authority are immune from 

suit for damages under the Civil Rights Act. Bennett v. Californic 

supra ; Silver v. Dickson , P. 2d (9th Cir. 1968) (No. 22129, 

decided November 8, I968), 

6. 



I') 



I 



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■I'; 



.Cv.c^ 



I * ••! 



J". il 



CONCLUSION 

For the aforementioned reasons the order of the District 
Court, dated February 28, 1968, denying appellant's motion for 
a permanent injunction against the California Adult Authority and 
dismissing the action as to the defendant Manley Bowler should 
be affirmed. 

Dated: March 26, 1969 



THOMAS C. LYNCH, Attorney 
General of California 



mhm 

CRSF 

002270 




(^/^ 



KARL S. MAYER 

Deputy Attorney General 

Attorneys for Appellee 



7. 



UNITED STATES COURT OF APPEALS 
FOR THE NINTH CIRCUIT 



» '« 



CAROL J. WINTHAL, 
MARTIN J. WINTHAL, 



versus 



MANLEY BOWLER, 



CAROL J. WINTHAL, 
MARTIN J. WINTHAL, 



versus 



Appellants, 



Appellee. 



Appellants, 



S.A. BERRY MAN, ROSS DUNLEVY, and 
STANLEY FOOLER, 

Appellees. 



APPELLANTS' OPENING BRIEF 



WAR 3 \^}} 
. B. I 



MARl Iggg 



No. 2 2, 8 08 



FILED 

MAR 4 1969 

S^^M. B. LUCK, CLERK 



On Appeal from the United States District Court for the 
Northern District of California 



NERI RAMC^S 

5v55 Polk Street 

San Francisco ^)IM)2 

Attorncv foi- Appcll;mi: 



UNITED STATES COURT OF APPEALS 
FOR THE NINTH CIRCUIT 



CAROL J. WINTHAL, 




MARTIN J. WINTHAL, 






Appellants, ^ 


versus 




MANLEY BOWLER, 






Appellee. i 


CAROL J. WINTHAL, 




MARTIN J. WINTHAL, 






Appellants, \ 


versus 




S.A. BERRYMAN, ROSS DUNLEVY, and ) 


STANLEY FOGLER, 


) 




) 

Appellees. ) 

) 



No. 2 2, 8 08 



APPELLANTS" OPENING BRIEF 

On Appeal from the United States District Court for the 
Northern District of California 



NERI RAMOS 
555 Polk Street 
San Francisco 94102 
Attorney for Appel hints 



Page 
Statement of Pleadings and Facts Disclosing 

Jurisdiction 1 

Statement of the Case 2 

Facts 2 

Preliminary Statement 2 

The Effect of the Dismissal 

as to Bowler on]\ 2 

Questions Involved 2-3 

Specifications of Error 4 

Argument 4 

1. In suits to enjoin official conduct, the pro- 
visions of 42 use 1983 are fully applicable 4 

2. The statutory presumption set forth in s. 3064, 
GaL Penal Code, of fugitivity and criminality 
inferred from an ex parte suspension or revo- 
cation of the parole of any prisoner is uncon- 
stitutional for lack of a rational connection 

between the fact presumed and the fact proved -l-.'^ 



I- 



Page 

3. For right of counsel purposes, there is no 
distinction between a probation revocation 

and a parole revocation hearing 5 

4. The California indeterminate sentence law 

is unconstitutional as violative of due process 
and equal protection clauses of the Fourteenth 
Amendment 6 

5. Bowler's pre-Katz [389 US 347] position that 
"a prisoner has no right of privacy" is no 

longer authoritative 6-7 

6. The dismissal as to the federal defendants, 
without findings of fact and conclusions of law, 

was erroneous. 7 

A. To "act under color of law" does not 
require that the defendant be an officer 

of the state 7 

B. This Court should certify the Bell v Hood 

[327 US 678] question ^ 

Conclusion '"^ 



i.I\Ui--ii-i y^ i. ^ vv_; J. i iv_y i\j. i ii_,ij 



Bell 

Burton 

Campbell 

Cohen 

Comm. 

Conway 

Dennis 

Dow 

Evans 

Katz 

Land 

Landry 

Lucero 

Mempa 

M us teen 

Peterson 

Smith 

Tot 



V Hood, 327 US 678 

V Wilmington, 365 US 715 
vPate, 3 CrL 2517 
vNorris, 300 Fed2d 24 
vTinson, 4 CrL 1070 

V Adult Authority, ^974, O. T. 1968 

V Village of Tonka Bay, 151 Fed2d 411 

V Baird, 380 Fed2d 882 

V Newton, 382 US 296 

V United States, 389 US 347 

V Dollar, 330 US 731 

V Daley, 288 FedSupp 200 

V Donovan, 354 Fed2d 16 
vRhay, 389 US 128 

V Johnson, 133 Fed2d 106 

V City, 373 US 244 

V Allwright, 321 US 649 

V United States, 319 US 463 



United States v Baker, 401 Fed2d 958, 978 

V Jones, 4 CrL 3007 

V Romano, 382 US 136 

V White, 4 CrL 2.) 17 



Page 
3-8 

7 
5-6 
8 
5 
3-6 
8 
8 
7 
6 
8 
4 
8 
5 
8 
7 
7 

5 

7 
7 



crry 



V Adams, 345 US -161 



Page 

Williams II 341 US at 99, 100 7 

Zwickler v Koota, 389 US 241 2-4 

Statutes 

Calif. Penal Code 1168 3 

3064 2 

Miscellaneous 

Fourteenth Amendment 6 

FRCP 12(b)(6) 8 



i 



UNITED STATED CUUKi' Ut APPEALS 



FOR THE NINTH CIRCUIT 



CAROL J. WINTHAL, 




MARTIN J. WINTHAL, 






Appellants, ) 


versus 




MANLEY BOWLER, 






Appellee. ) 


CAROL J. WINTHAL, 




MARTIN J. WINTHAL, 






Appellants, ) 


versus 


\ 


S. A. BERRYMAN, ROSS DUNLEVY, and ) 


STANLEY FOGLER, 


) 




) 

Appellees. ) 

) 



No. 2 2. 8 8 



APPELLANTS' OPENING BRIEF 

STATEMENT OF PLEADINGS AND FACTS 
DISCLOSING JURISDICTION 

The complaint sets forth three claims and injunctive rclici is 
souglit in this civil rights action based on 42 USC 1983, 28 USc: I'^.W.. 
and 1343. The city and county defendants await trial under tiic fii'si 
claim and no issue is presented as to those defendants. 

44ie i:)istrict Court dismissril ihc second claim as lo die U'dcia 



injunction should not issue as to the state defendants. This Court has 
jurisdiction of the appeals under 28 USC 1291-2. 

STATEMENT OF THE CASE 
Facts 



Preliminary Statement 
The dismissal as to Bowler is inextricably bound together with 
liability of Smythe, and Kamp, other state employees, because the 
District Court has declined to rule on the latter two motions to dismiss 
pending determination as to Bowler only. Because of this fact and be- 
cause the unconstitutional state statute [Cal. Penal 3064] bears strongly 
upon the propriety of the issuance of a permanent injunction, appellants 
will discuss the facts under the specifications of error in two categories: 
First, as to Bowler and his state agents, and finally, as to the activities 
of the federal defendants. 

Questions Involved 
1. Constitutionality of the California "fictional fugitive statute" 
[3064 Penal Code] which presumes fugitivity and criminalit.\- from an 
ex parte suspension or revocation of parole, as lacking a rationaJ 
connection between the fact presumed and the fact proved. This ([uesiion 
is raised in connection with the propriety of a permanent inj unci ion \o 
enjoin Bowler (cf. Zwickler v Koota, as District Attorney, Cou nt > of 
Kings, 389 US 241, 249, 88SCt301). 



2. Is Bowler required or mandated to hold a "parole revocation 
court" at which the alleged violator is accorded the right to appear 
personally with counsel, because Bowler's actions involve a deprivation 
of liberty just as much as did the original criminal action? This ques- 
tion arises as concomitant with injunctive relief based on "unauthorized 
action under color of state law" by appellee Bowler. (Cf. Combs v La- 
Valee , 36 LW 2468). 

3. Whether California's indeterminate sentence law [1168 Penal 
Code ] delegating to the executive branch parole authority absolute dis- 
cretion, uncontrolled by standards or directions of any kind, to impose 
a life sentence, violates the Due Process Clause of the Fourteenth 
Amendment? This question springs from the propriety of injunctive 
relief based on "unauthorized action under color of state law" by 
appellee Bowler. (Review has been granted in a related case: Conwa\^ v 
Adult Authority, No. 974 [211 Misc.] O. T. 1968.) 

4. Whether failure of the District Court to render findini^s or 
conclusions of law, although requested to do so, permits its jLiJi:;nicnt 
of dismissal as to the federal defendants to be labeled "interlocutors " 
or whether activities of federal defendants here is distinguishable from 
13e]l v Hood, 327 US 678 ? This question springs from the dismissal 
based on Rule 12b, shown in the record at pp. 105-6. 



5. Is the California cioeiiiiie iliat a prisoner has no i-it\lii '* 
pi" I vac 



cy constitutionally viable.' Denial of injunctive r^'liel ua.- I'a.-->l 



on the California Attorney General's position [Tr. 90], "a prisoner 
has no right of privacy" citing People v Lopez , 60 Cal2d 233, 248, 
and People v Morgan, 197 CA2d 90, 93. 

SPECIFICATIONS OF ERROR 

1. The Court erred in dismissing the permanent injunction 
proceedings, and discharging the order to show cause, without findings 
and conclusions of law. 

2. The Court erred in dismissing the action as to Bowler 
under Rule 12 (b), and erred in staying proceedings as to Smythe 
and Kamp, other state agents, pending disposition of the appeal as 
to Bowler. 

3. The dismissal as to the federal defendants [Tr 105-106] 
without findings of fact and conclusions of law, was erroneous. 

ARGUMENT 

1. In suits to enjoin official conduct, the provisions of 42 L'SC 
1983 are fully applicable. Zwickler v Koota, 389 US 241, 249-251, 

88 set 391. The complaint alleged sufficient irreparable injur\ to 
justify equitable relief, and abstention was improper. The court Ivlow 
should have decided the constitutionality of the statutes [3064 and 1 1 iv"^. 
Cell if. Penal Code]. Landry v Haley, 288 Fed. Supp. 200. 

2. The statutory presiimpi ion set forth in section 'M)i^\. C^ahi. 
IVnal CJode, of fugitivity anel criniina I iiy inlerred from an o\ \\uic 
suspension or revocation of ilu/ parolr of any prisoner is uik-"i1' iMn:i''"' 



for lack of a rational connection between the fact presumed and the 
fact proved. In Tot v United States, 319 US 463, 63 SCt 1241, the 
Court, relying on a line of cases dating from 1910, reaffirmed the 
limits which the Fifth and Fourteenth Amendments place "upon 
the power of Congress or that of a state legislature to make the 
proof of one fact or group of facts evidence of the existence of the 
ultimate fact on which guilt is predicated. " Where the inference is 
so strained as not to have a reasonable relation to the circumstances 
of life as we know them it is not competent for the legislature to 
create it as a rule governing the procedure of courts. Judged by 
this standard, the statutory presumption in statute 3064 is con- 
stitutionally infirm. Cf. U.S. v Romano, 382 US 136, 86 SCt 279. 

3. Since Mempa, 389 US 128, requires a lawyer at every 
stage, appellee Bowler is required, if not mandated, to hold a "parole 
court" where the alleged violator is given the right to appeor personal !>■ 
with counsel, because Bowler's actions involve a deprivation of liberty 
just as much as did the original criminal action. 

Here the relevant facts which triggered the revocation wore so 
capriciously and arbitrarily determined that, in effect, the inmaic is 
deprived of equal protection of the laws. Caprice is further siigiicsied 
by the retroactive suspension without notice. Cf. Campbell v T aic. CA- > 
9/13/68. Also, the Supreme Court of Pennsylvania finds "compK-k'l\ un 
L^aiablc" the distinction, lor rii^lii lo eounsel purposes, between a piolvi- 
Hon revocation and a j'jarolc rc>vo(.-ai ion heai'ing. Comm ^ v rin^'*'"- 
l/IS/(,'), 4 CrL J 070. 



4. The California indeterminate sentence law which prohibits 
the court in imposing sentence from fLxing the "term or duration of the 
period of imprisonment" [Penal Code 1168] is unconstitutional. 

The statute delegates to the executive branch parole authority 
absolute discretion, uncontrolled by standards or directions of any 
kind, to impose a life sentence, and violates the due process clause 
of the Fourteenth Amendment. Cf. Conway v Adult Author ity, No. 974 
[211 Misc.] October Term, 1968. 

Cast in terms of denial of equal protection, the statute permits 
the facts on which appellee Bowler acted to be unreliably determined, 
hence parole is never considered afterward, merely the date changed 
annually. Cf. Campbell v Pate , CA-?, 9/13/68. 

5. The denial of injunctive relief against Bowler was based 
in part on tlie California Attorney General's position [Tr. 90], that 
"a prisoner has no right of privacy" citing People v Lopez, 60 Cnl2J 
233, 248, and People v Morgan, 197 CA2d 90, 93. However, tliese 
pre- Katz [ 389 US 347] cases are not controlling. The crucial fact 
now, is that the respective speakers did not consent to the overlienring 
of their statements and that tlie conversations were overheard h\ iliirJ 
persons uninvited by the speaker. To claim, as the California Aium-hcn 
General does, that one party can waive tlie Fourth Amcndmeiii ri.^his ot 
another is the same thing as saying iliat Katz would have bccu ^\cc\^\c^\ 
differently if the recipient of ilic iiitcrcepicd phone call haJ ciMisenU'd 

to ihu C]()vernment's buggin.v;. It is unbelievable that such a nuMmn^i-^-S-^ 



form of consent would have rendered the defendant's overheard 
statements any more admissible in Katz. Cf. U.S. v Baker , 401 
Fed2d 958, 978; U.S. v Clifford Jones, 9/30/68, 4 CrL 3007; 
U.S. V. White , CA-7, 4 CrL 2317. 

6. The dismissal as to the federal defendants [Tr 105-106] 
without findings of fact and conclusions of law, was erroneous. 

The court below grounded the dismissal on Rule 12 (b) as 
shown in the record at p„ 106, line 6. However, "to act under color" 
of law does not require that the defendant be an officer of the state. 
It is enough that he is a willful participant in joint activity with the 
state or its agents. Any other conclusion would establish an artificial 
distinction between the "under color" concept in 18 USC 242 and its 
civil counterpart, 42 USC 1983. Appellants contend that the meaning 
is the same in both statutes. 

How far can a person, not a state agent, insinuate himself with 
state agents whose conduct is said to violate the Fourteenth Amendment, 
and not be recognized as a joint participant in the challenged actlvit> ? 

Appellants contend the federal defendants' activity cannoi be 
considered "purely private" on authority of Evans v Newton . 3S2 I'S 
2^)6; Smith v Allwright , 321 US 649; Terry v Adams, 345 US IM: 
Williams II , 341 US at 99-100; and note, concurring opin. . (^tlKiiKm 
in Peterson v City of Greenville, 373 US 244, or Burton v Wilnun;.'nn 



Parkin^^ /Xinhority, 365 US 715, all involving "Joint pan ici pa i 



auls. 



Appellants' keystone is Bell v Hood, 327 US 678, and Dow 
V Baird, 389 Fed2d 882. 

The motion to dismiss provided by Rule 12 (b) (6), wielded by 
the federal defendants, is not a surreptitious reincarnation of the 
former general demurrer which was abolished by Rule 7(c). That 
abolition meant what it said. Dennis v Village of Tonka Bay , 151 
Fed2d 411; Musteen v Johnson , 133 Fed2d 106. 

See also Land v Dollar , 330 US 731, 735, cited with approval 
in Brown v Brown, 368 Fed2d 992: Cohen v Norris , 300 Fed2d 24: 
and Lucero v Donovan, 354 Fed 2d 16. 

A fair appraisal of the judgment of dismissal below, grounded 
upon the absence of a debatable constitutional issue, and no otlier con- 
struction is possible of the court's judgment, according to attorneys 
for the federal defendants, in light of tlie fact that the entire record 
is now before this Court, it should, on its own motion, certify the 
Bell V Hood [ 327 US 678] question, pursuant to the Revised Rules of 
the Supreme Court of the United States (Part VI, Jurisdiction of Cer- 
tified Questions, Rule 28, subd. (1) and (2), and this brief should Iv 
treated as a request or application therefor, or, in the alternative, 
this Court has the power to certify such question "on its own nioiiun' 
(subd. 2, Rule 28, supra), and to send the entire record U) ihe 
Supreme Court so certified. In any event, failure of ihc Disirici 
Ccxirt to state any theory o\' decision in entering the dismissal, is 
no basis for overruling Brown, ( '.oIkmi, Uucoro , and oiiicr casi.;. m 
this circuit. Cf. Land v Dollui, :'.:'.() I 'S 7:') 1 , 73^5. 



I 



CONCLUSION 
For all of the foregoing reasons, the judgments should be 

reversed. 

Respectfully submitted, 

' ' ^' — > 

/ ^ ^ 



/ 



' Ir '■^' 



~^ / NERI RA]\10S 
Attorney for Appellants 



Certificate of Scrxice by Mail 

State of California, ) 

) ss. 
County of San Francisco. ) 

I, the undersigned, depose and say: 

I am a citizen of the United States, over eighteen years of age. 
and not a party to the within appeal; that on March 1, 1969, 1 served 
a copy of the within Appellants' Opening Brief on the Appellees, by 
placing a true copy thereof in an envelope with adequate first class 
postage thereon, addressed to appellees' counsel addressed as follows: 

Jerry K. Cimmett Karl S. Mayer 

Asst. U.S. Atty. Deputy Atty. Gen'l. 

450 Golden Gate Ave. 6000 State Bldg. 

San Francisco 94102 San Francisco 94102 

and I placed the said envelopes in a postoffice box located at 7th Siivci 
and Mission Street, San Francisco, California. 



Subscribed and sworn to before me, 
thi.s-4^ day of March, 1969. 

JAMES H. DUANE 





Public in and for said C^miiUy 
and Slate. ...^-^->''-'— *'"^'-"*f > 






r.r;Y /, 



.,0 CCUN'V OF 



I 

I 



i 



CERTIFICATE 
I certify that in connection with the preparation of this brief 
I have examined Rules 18, 19 and 39 of the United States Coin-t of 
Appeals for the Ninth Circuit and that, in my opinion, the foregoing 
brief is in full compliance with those rules. 



NBRI RAMOS 
Attorney for Appellants 



No. 22,809 

IN THE 

United States Court of Appeals 

For the Ninth Circuit 



1 



Wyatt St. B. Eustis, Jr., 

Appellant, 

vs. 

UisnTED States of America, 

Appellee. 



Appeal from the United States District Court 
for the Northern District of California 

APPELLANT'S OPENING BRIEF 



DENisns L. Woodman, ^ ^^) 

Lin B. Densmore, * 

343 Sansome Street - Tenth Floor, 
San Francisco, California 94104, 
Telephone: 392-2037, 

Attorneys for Appellant. 



PCRNAU-WALBH PRfNTING CO., SAN FRANCISCO 



Subject Index 

Page 

Appellant's opening brief 1 

Jurisdiction 1 

Statement of facts 2 

Issues presented 6 

Argument 6 

A. Defendant's motion for judgment of acquittal should 
have been granted 6 

B. The Circuits are in conflict on the meaning of wilfulness 

as applied to § 7203 8 

1. The Ninth Circuit 8 

2. The Third Circuit 11 

C. The reasoning of the Third Circuit should be applied to 
the facts of this case 16 

D. Refusal to permit trial counsel to inspect the probation 
report is a denial of effective aid of counsel 21 

Conclusion 22 



Table of Authorities Cited 



Cases Pages 

Abdul V. United States (9th Cir. 1958), 254 F.2d 292 

8, 9, 10, 11, 16, 19 

Crawford v. United States (DC Cir. 1967) , 375 P.2d 332 .... 7 

Martin v. United States (9th Cir. 1963), 317 F.2d 753 10 

Spies v. United States, 317 U.S. 492, 497-498, 63 Sup. Ct. 364, 
367, 87 L.ed. 418 16, 19, 20 

United States v. Byi^d (2d Cir. 1965), 352 F.2d 570 8 

United States v. Murdock (1933), 290 U.S. 389, 395, 54 Sup. 
Ct. 223, 226, 78 L.ed. 381, 385 16, 17, 18, 19, 20 



ii Table of Authorities Cited 

Pages 
United States v. Vitiello (3rd Cir. 1966), 363 F.2d 240, 242 
(1966) 11, 13, 14, 15, 20 

Verdugo v. United States of America (9th Cir. decided May 
16, 1968) No. 20803 21, 22 



Statutes 

Revenue Act of 1928, § 146(a) 16 

Revenue Act of 1926, § 1114(a) 16 

Title 18 U.S. Code Section 3231 1 

Title 26 U.S. Code Section 7203 1, 2, 6, 8, 10, 11, 22 

Title 28 U.S. Code Section 1291 2 



Rules 

Fed. R. Crim. P. Rule 32(a) 21 



No. 22,809 

IN THE 

United States Court of Appeals 

For the Ninth Circuit 



Wyatt St. B. Eustis, Jr., 

Appellant, 

vs. 

United States of America, 

'Appellee. 



Appeal from the United States District Court 
for the Northern District of California 

APPELLANT'S OPENING BRIEF 



JURISDICTION 

By information filed October 11, 1967, Appellant 
was charged with three counts of misdemeanor viola- 
tion of Title 26 U.S. Code Section 7203, failure to file 
tax returns for the years 1962, 1963 and 1964. A jury 
trial was waived and trial commenced before the 
Honorable William T. Sweigert on February 8, 1968. 
Appellant was convicted on all three counts and sen- 
tence was pronoimced on March 5, 1968. Appellant 
filed a timely notice of appeal on March 12, 1968. 

The District Court assumed jurisdiction under the 
provisions of Title 18 U.S. Code Section 3231. This 



Coui"t has jurisdiction to review this judgment under 
Title 28 U.S. Code Section 1291. 



STATEMENT OF FACTS 
By information filed October 11, 1967, appellant 
was charged with three counts of the misdemeanor 
violation of Title 26 U.S. Code § 7203— failure to file 
tax returns for the years 1962, 1963, and 1964. (Tr. 
of R. 1.) It was stipulated that appellant received 
gross income in excess of $600.00 duiing the years 
charged, that appellant maintained accurate business 
records concerning income and expenses during the 
years charged, that appellant was first contacted by 
agents of the Internal Revenue Service on January 
31, 1966, that on March 8, 1966, the appellant filed 
a delinquent federal income tax return in his owti 
name and tliat of his wife for each of the calendar 
years 1957 through 1964 inclusive, and did so by pre- 
senting those returns to a special agent of the Internal 
Revenue Ser^dce; and that during the calendar years 
1957 and 1958 appellant applied for and was gi-anted 
extensions of time to file 1957 and 1958 returns, but 
that for the years 1959 through 1964 appellant made no 
request for extensions and no such extensions of time 
were granted. (Tr. of R. 5.) 

Trial was commenced Thursday, February 8, 1968, 
a juiy having been waived. (R.T. 2) From the outset 
it was clear that the sole issue presented to the Dis- 
trict Couii was whether there was wilful failure to 
file the required returns for the years in question. 
(R.T. 5.) , 



Appellant was and is a public accountant with 
offices at 934 Terminal Way, San Carlos, California. 
(R.T. 33:6.) Appellant's failui'e to file income tax 
returns for the years 1957 through 1964 was due to 
the pressiu*e of business; appellant considered his 
clients' tax affairs as having the greater priority. 
(R.T. 33:13-22.) After having been granted exten- 
sions for the years 1957 and 1958 the pressure of 
appellant's business increased. There were no other 
accoimtants or associates in appellant's office, only 
some girls doing strictly bookkeeping work. They did 
not i^repare returns. Appellant found that in order 
to prepare retui'ns for years subsequent to 1957, it 
was necessary to go back and put the initial return 
together because it was impossible to file a later re- 
turn before the earlier because of such factors as 
depreciation and amortization. (R.T. 34:3-35:3.) 
Throughout the period within which appellant was 
charged with failing to file income tax retui*ns, appel- 
lant maintained records because he knew the returns 
were to be filed, had to be filed, and intended to file 
them. (R.T. 35:13-23.) Appellant never intended to 
avoid filing returns. (R.T. 36:2.) Moreover, during 
the year 1960, and possibly 1962 and 1963 appellant 
became a remaindei-man in two trusts which were 
distrilmted in the 1960's. This caused a change in the 
type of income appellant received during I960, 1962, 
and 1963 and there were tax problems involved with 
the trusts themselves. This affected appellant's ability 
to prepare an income tax return because the figures 
originally submitted to appellant were in error and 
correspondence with the trustees was necessary. (R.T. 



36.) There were two tmsts, each distributed in a sep- 
arate year (R.T. 37:11). Appellant kept accurate 
records of all transactions concerning these trusts 
(R.T. 37:24). 

Appellant's attempts to make aiTangements to find 
time to prepai'e these tax retiu^ns were frustrated by 
interruptions from clients or by internal office prob- 
lems including audits from various governmental 
agencies. (R.T. 38:2-16.) 

Appellant conferred with special agent Brennan of 
the Internal Revenue Sei-vice on Febi-uary 2, 1966, 
and on Mai'ch 8, 1966, appellant presented all of the 
returns for the years in question. These returns were 
prepared by the appellant personally who took time 
out from his office work to do this, devotmg from 
eight to ten hours of each working day including Sat- 
lu'days and Simdays — about twenty-one days. This 
included preparation of returns from 1957 through 
1964. (R.T. 39:1-40:8.) 

Appellant intended to file his federal income tax 
returns as soon as the figTires were put together so 
that the returns could be filed, and this was as soon as 
possible. (R.T. 41:4-10.) Appellant filed State of CaU- 
fomia tax retm'ns at the same time he filed federal 
returns. (R.T. 42:8-13.) In order to prepare these 
returns it was necessary for appellant to forego work 
on clients' returns. (R.T, 43:9.) Appellant was \m- 
aware that it was a criminal offense to wilfully fail 
to file income tax returns on time without proper ex- 
tension. (R.T. 49:18-22.) 



At the time ajopellant guve the completed income 
tax returns to Mr. Brennan, he also gave checks cov- 
ering the taxes, including- penalties and interest due to 
March 8, 1966. (R.T. 16:13.) The penalty through 
March 8, 1966, was twenty-five per cent and the inter- 
est was six per cent. (R.T. 17:15.) Thus, since ap- 
proximately March 8, 1966, the government has had 
all of its money. (R.T. 19:15.) On receipt of these 
tax returns, the Internal Revenue Agents reviewed 
them and foimd no errors based on computations. 
(R.T. 19:21-20:3.) Appellant's records were also ex- 
amined thoroughly and there was no evidence of a 
double set of books, of false entries, of alterations in 
the records, nor of false invoices or false documents. 
(R.T. 21:11-25.) There was no destruction of records 
(R.T. 22:2) and nothing from the records or the Rev- 
enue Agents' investigation of any conduct on the part 
of the appellant leading the agents to believe that 
there was any intent to mislead or conceal (R.T. 22: 
4-12.) The records were excellent. (R.T. 23:8.) 

The investigating agents were satisfied that appel- 
lant had made proper reports, during the years in 
({uestion, concerning income tax and withholding tax 
for employees and employees' contributions (R.T. 25: 
10), and that the apellant had an employers' account 
munber (R.T. 25:15). All of these papers were in 
order and timely filed. (R.T. 25:18.) The internal 
revenue agents could reasonably conclude that insofar 
as the operation of appellant's business was concerned, 
and the handling of funds collected from employees 
to be paid to the United States Government and the 



state of California, all of those returns were in 
proper order aiid filed timely and properly computed. 
(R.T. 26:16.) 

The internal revenue agents were unable to find any 
bad motive or evidence of an evil intent on the part 
of the appellant, "other than the failure to file re- 
turns." (R.T. 29:1-18.) 



ISSUES PRESENTED 

1. Is the Mere Failure to File an Income Tax Return 
in the Absence of a Govermnent Showing of Mens 
Rea, Bad Piu'pose, Intent to Avoid a Tax or Other 
Wrongful Pui'pose, Sufficient to Prove Wilful Fail- 
ure to File within the Meaning of Title 26, U.S. Code 
§7203? 

2. Does Defendant's Right to Effective Aid of 
Counsel Require that Trial Counsel Be Permitted to 
Read the Presentence Report? 



ARGUMENT 

A. DEFENDANT'S MOTION FOR JUDGMENT OF ACQUITTAL 
SHOULD HAVE BEEN GRANTED. 

At the close of the Prosecution's case and mth only 
the stipulation and the testimony of special agent 
Brennan as evidence, counsel for the defendant moved 
the Court for a judgment of acquittal. (R.T. 30.) 
The motion was submitted (R.T. 32:15), but not ruled 
upon. At this point the agent had testified that IVIr. 



Eustis told him he had not filed any tax returns for 
the years in question (R.T. 11:19), that he had had 
sufficient income during the years in question (R.T. 
11:25), described the soiu^ces of his income (R.T. 12: 
8) and gave as his reason for not filing the explana- 
tion that he was too busy preparing his clients' tax 
returns and maintaining their accomiting records 
(R.T. 12:15). 

Mr. Eustis also told the agent that although he had 
requested extensions to file for the years 1957 and 
1958, he did not request further extensions because 
he would rather pay the penalties to avoid the trouble 
for himself and his clients. (R.T. 14:8.) All of Mr. 
Eustis' records were precise and accurate (R.T. 19: 
28) and the agent was miable to perceive any bad mo- 
tive other than not filmg (R.T. 29:1). This was the 
state of the record at the time the Government rested 
and trial comisel moved the Court for judgment of 
acquittal. (R.T. 30.) 

"The e\ddence at the close of the Government's 
case must ])e sufficient to sustain a conviction, 
that is, it must be such evidence that reasonable 
persons could fijid guilt beyond a reasonaljle 
doubt. It is not a requirement that the evidence 
compel, but only that it is capable of or sufficient 
to persuade the jiuy to reach a verdict of giiilt 
by the requisite standard." 

Crawford v. United States (DC Cii\ 1967), 375 
F.2d 332, 334. 

"Ordinarily one is not guilty of a crime im.less he 
is aware of the existence of all those facts which 
make his conduct criminal. That awareness is all 



8 



that is meant by the mens rea, the 'criminal in- 
tent' necessaiy to guilt. ..." 

United States v. Byrd (2nd Cir. 1965), 352 
F.2d 570, 572. 

It is respectfully submitted that the evidence was 
insufficient to sustain the conviction and the motion of 
appellant's trial coimsel should have been granted. 



B. THE CIRCUITS ARE m CONFLICT ON THE MEAlflNG OF 
WILFULNESS AS APPLIED TO §7203. 

1. The Ninth Circuit, 

In filing notice of appeal in the present case, comi- 
sel were not unaware of this Court's decision in Abdul 
V. United States (9th Cir. 1958), 254 F.2d 292. There, 
this Court determined that the meaning and degi-ee 
of proof of ''wilful" differed depending on whether 
the crime charged was a felony or a misdemeanor. 

"The meaning of the word 'wilfully' as used in 
the tax statutes has l>een considered in a number 
of cases and seems to have come to rest in this 
circuit, as well as others, as meaning with respect 
to felonies, 'with a bad pui'pose or evil motive.' 
(citing cases) But the meaning of the word ^vd\- 
fuUy' as used in the statute defining a misde- 
meanor has not as yet reached such repose," 
Ahdul V. United States (9th Cir, 1958), 254 
F.2d 292, 293, 

In Ahdul this Court approved the following instruc- 
tion: 



<( 



. the word 'wdlfiiF as used in (the misde- 
meanor) eoimts , . . , that is, failing to make a tax 
retiu-n, means with a bad purpose or mthout 
gTomids for believing that one's act is lawful or 
without reasonable cause, or capriciously or with 
a careless disregard whether one has the right so 
to act." 

Abdul V. United States (9th Cir. 1958), 254 
F.2d 292, 294. 

This Court explained: 

"The definition of the word 'wilfully' as used in 
the misdemeanor statute was correctly defined in 
the instructions given by the court. That a differ- 
ence exists in the meaning of 'wilfully' when used 
in the statute defining a felony and that defining 
a misdemeanor is recogTiized. It is 'a word of 
many meanings, its constructions often being in- 
fluenced by its context.' (United States v. Mur- 
doch, 290 U.S. 389, 54 Sup. Ct. 223, 78 L.ed. 381.) 
'It may well mean something more as applied to 
non-payment of a tax than when applied to fail- 
ure to make a return. Mere voluntary and pur- 
poseful, as distinguished from accidental, omis- 
sion to make a timely return might meet the test 
of wilfulness.' (Spies v. United States, 1943, 317 
U.S. 492, 497-498, 63 Sup. Ct. 364, 367, 87 L.ed. 
418.) In the definition given, tJie trial court began 
with the statement that 'wilful' as used in the 
misdemeanor coimts means with a bad purpose, 
which standing alone would meet appellant's criti- 
cism, but it is argued that the addition of the 
words ' or without grounds for believing that one's 
act is lawful or without reasonable cause, or ca- 
priciously, or with a careless disregard whether 
one has the right so to act,' so watered down the 



10 



meaning of the terai Svitli a bad purpose' as to 
render the instruction erroneous. We conclude 
that the word 'wilful' as used in the misdemeanor 
statute means something less when applicnl to a 
failui-e to make a retui-n than as applied to a 
felony nonpayment of a tax. This being tme, then 
the words used in the insti\iction defining 'wilful' 
as relates to a misdemeanor adequately and 
clearly point up tliat difference." 
Abdul V. United States (9th Cir. 1958), 254 F. 
2d 292, 294. 

*'We hold that the insti^uction defining 'wdlful' 
as used in the misdemeanor counts of the indict- 
ment in the instant case was not erroneous." 
Abdul V. United States (9th Cir. 1958), 254 F.| 
2d 292, 295. 

This Court reaffirmed its view as stated in Abdul, 
supra, in Mmiin v. United States (9th Cir. 1963), 317 
F.2d 753. It seems, then, that in the 9th Circuit with 
respect to the violation of § 7203, ''wilful" means one 
of the following: 

1. With a bad pui-jDose, or 

2. Without groimds for believing that one's act is 
lawful, or 

3. Without reasonable cause, or 

4. Capriciously, or 

5. Witli a careless disregard whether one has the 
right so to act. 

It should be remembered that appellant was im- 
aware that it was a criminal offense to fail to file on 



11 



time without proper extension, wilfully. (R.T. 49:18.) 
The Government offered no proof whatever of any of 
the foregoing "misdemeanor" definitions of wilful. 
The only evidence in suppoi't of *' wilfulness" was the 
failure to file itself. 

2. The Third Circuit. 

In United States v. VitieUo (3rd Cir. 1966), 363 

F.2d 240, the court was concerned with the definition 

of "wilfully", in its application to § 7203. The trial 

coui"t had charged the jiu'y as follows: 

"And the word is employed to characterize such 
conduct as marked by a careless disregard 
whether or not one has a right to so do. 

"And by the term wilfully, as used in the statute, 
means with a bad purpose or tvithout grounds for 
believing that one's act is lawful or tvith such a 
careless disregard whether one has a right so to 
act. 

"The word wilful means with a bad purpose or 
tvithout grounds for believing that one's act is 
lawful or ivithout reasonable cause or capriciously 
or with a careless disregard whether one has a 
right so to act." 

United States v. VitieUo (3rd Cir. 1966), 363 

F.2d 240. (Emphasis added by the Court.) 

The 3rd Circuit, in reviewing the cases interpretmg 

the word "wilful" as it relates to Title 26 § 7201 and 

§7203, stated: 

"Our examination of the issue thus raised begins 
with the much cited opinion in United States v. 
Mtirdock (1933), 290 U.S. 389, 54 Sup. Ct. 223, 78 



12 

L.ed. 381, relied on by the dissent in the instant 
case and presumably the basis of the lower court's 
instniction. In Mnrdock, the defendant was con- 
victed for failing to give required tax infonnation 
in ^4olation of an earlier statute from which sec- 
tion 7203 was derived. The lower court had in- 
structed the jury to the effect that one who 
voluntarily refused to give the required informa- 
tion would be guilty of 'wilfully' failing to give 
the infoimation. Thus, the issue before the Su- 
preme Court was the proper definition of * wil- 
fully' as the mens rea requirement of this 
misdemeanor. In framing the issue, the couii; 
noted that wilful is a word of many meanings, 
for example, merely volimtary as contrasted with 
accidental, but that in a criminal statute it gen- 
erally means 'an act done with a bad purpose 
* * * ; without justifiable excuse * * *.' 290 U.S. 
at 394, 54 Sup. Ct. at 224. Then, the court con- 
tinued to catalog various other meanings of wil- 
fully, including the following: 

'The word is also employed to characterize a 
thing done mthout groimd for believing it is 
lawful * * * or conduct marked by careless dis- 
regard whether or not one has the right so to 
act * * *.' 290 U.S. at 394-395, 54 Sup. Ct. at 
225. 

"However, this enumeration of different mean- 
ings of wilfully in various contexts should not be 
read as a statement that several definitions, among 
them the one last (juoted above, are comprehended 
by the criminal statute in question. Indeed, 
rather than adopting a number of meanings, the 
Court proceeded to consider the context of the 
misdemeanor section and concluded that A\'ilful 
as an element of the offense coimoted 'bad faitli 



13 



or evil intent'. 290 U.S. at 398, 54 Sup. Ct. at 
226." 

United States v. Vitiello (3rd Cir. 1966), 363 
F.2d 240, 242 (1966). 

''Instructions which define an act as wilful when 
done S\T.thout gTound for believing it is lawful', 
or when 'marked by careless disregard whether 
or not one has the right so to act', have been re- 
jected by this court as improper dilutions of the 
scienter required by section 7203. ZJnited States v. 
Palermo (3rd Cir. 1958), 259 F.2d 872; accord 
Haner v. United States (5th Cir. 1963), 315 F.2d 
792; cf. United States v. Litmau (3rd Cir. 1957), 
246 F.2d 206. 

"Our afftrmative statements of the meaning of 
'wilfulness' in section 7203 or its predecessor 
clearly exclude any type of carelessness or negli- 
gence, however inexcusable. Thus, in the Palermo 
case we said: 

"Wilfuhiess is an essential element of the crime 
prescribed by [the misdemeanor section] 
* * * . It requires existence of a specific wi'ong- 
ful intent — an evil motive — at the time the 
Clime charged was committed * * *. Mere lax- 
ity, careless disregard of the duty imposed by 
law, or even gi'oss negligence, miattended by 
'evil motive' are not probative of '"wilfulness' ". 
259 F.2d at 882. 

"Similar language appears in Utiited States v. 
Litman, supra at 209. The 'wilful' requirement 
means an act iDoth 'intentional and reprehensible', 
United States v. Goldman (3rd Cir. 1965), 352 
F.2d 263, 265 n. 3, 'attended by knowledge of the 
legal obligation and purpose to prevent the gov- 



14 



enmient from getting that Avhicli it lawfully re- 
quires', United States v. Cirillo (3rd Cir. 1957), 
251 F.2d 638, 639." 

United States v. Vitiello (3rd Cir. 1966) 363 
F.2d 240, 242. 

''Two cases in the Ninth Circuit, Abdul v. 
United States, 1958, 254 F.2d 292, and Martin v. 
United States, 1963, 347 F.2d 753, and the dissent 
in the instant case seek to justify a less restric- 
tive definition of Svil fulness' by arguing- that the 
standard of wilfulness is different for the mis- 
demeanor, defined by section 7203, than for the 
felony — attempt to evade tax — defined by section 
7201. Justification for this claimed distinction 
is thought to be foimd in the lan.guage of the 
Spies case in which the Court distinguished the 
misdemeanor from the felony, saying: 

'The difference between the two offenses, it 
seems to us, is found in the affinnative action 
implied from the term "attempt", as used in 
the felony subsection.' 317 U.S. at 498, 63 Sup. 
Ct. at 368. 

i* * * j-piQp tiie felonj^] Congress intended 
some wilful conunission in addition to the \d\- 
ful omissions that make up the list of misde- 
meanors.' 317 U.S. at 499, 63 Sup. Ct. at 368. 

"It is true that, by this language. Spies makes a 
distinction between the ci-iminality of the misde- 
meanor and the criminality of the felony. United 
States V. Long (3rd Cir. 1958), 257 F.2d 340. 
However, this distinction is foimd in the addi- 
tional misconduct which is essential to the viola- 
tion of the felony statute, examples of which are 
given in Spies at page 499 of 317 U.S., at page 



15 



368 of 63 Sup. Ct., and not in the quality of wil- 
fulness wliich characterizes the "\vi'ongcloing'. Thus, 
in Sansone v. United States, 1965, 380 U.S. 343, 
85 S. Ct. 1004, 13 L.ed. 2d 882, the defendant, in- 
dicted and tried for the section 7201 felony, 
claimed that he was entitled to a charge on the 
misdemeanor mider the lesser included offense 
docti-ine. After finding' that the only issue at trial 
was whether the defendant's acts charged as con- 
stituting attempted tax evasion were SvilfuF, the 
Coui't held that the defendant was not entitled to 
a lesser offense charge because, as applied to the 
given fact situation, 'Wilful' in the two sections 
' "covered" precisely the same ground'. 380 U.S. 
at 352, 85 Sup. Ct. at 1010. 

"Actually, one of the conclusions of the Court in 
Spies was that to be convicted of failure to pay a 
tax, the misdemeanor, the failure must be char- 
acterized by ' some element of evil motive' because 
to con\dc.t in absence of such scienter would vio- 
late 'our traditional aversion to imprisonment for 
debt'. 317 U.S. at 498, 63 Sup. Ct. at 367. 

"It follows that it was error in this case to 
instruct the jury that it might find 'wilfulness' 
within the meaning of section 7203 in conduct 
characterized by merely careless disregard of 
legal obligation or in acts that were merely ca- 
pricious or not justified by any reasonable belief 
in their legality." 

U7iited States v. Vitiello (3rd Cir. 1966), 363 
F. 2d 240, 243. 



16 



C. The Reasoning' of the Third Circuit Should Be Applied to the 
Facts of This Case. 

Til oi'doi' to apply the reasoning of the Third Cir- 
cuit to the facts of this case, it is not necessary for 
this Court to wholly reject Abdul and similar cases. 
Ahdiil involved a jury trial where the instructions 
found proper included the phrase "Wilful . . . means 
with a had purpose. . . ," No case has been found in 
the Ninth Circuit where this Court has held that a 
mere failure to file a return, without more has been 
held to be a sufficient showing of wilfulness to justify 
a conviction. 

It appears that in arriving at its conclusions, the 
Court in Abdul stressed the dictum of United States 
V. Murdoch, 290 U.S. 389, 54 Sup. Ct. 223, 78 L.ed. 
381, and Spies v. United States, 317 U.S. 492, 497-498, 
63 Sup. Ct. 364, 367, 87 L.ed. 418, to the effect that the 
word "wilful" is a word of many meanings, and may 
w^eU mean sometliing more as applied to nonpayment of 
the tax than where applied to failure to make a re- 
turn. A careful analysis of Murdoch and Spies ap- 
pears not to compel the conclusion that proof of the 
misdemeanor crime of failure to file a tax return may 
be proved by evidence less than that amoimting to a 
mens rea. 

In Murdoch the defendant was charged with re- 
fusal to give testimony and supply information re- 
lating to deductions claimed in his tax returns for 
monies paid to others in violation of § 1114(a) of the 
Revenue Act of 1926 and § 146(a) of the Revenue 
Act of 1928, which sections were identical. Inter alia, 
these sections provide : 



17 



"any person . . . who wilfully fails to . . , make 
such return ... or supply such Information. . ." 

A careful examination of Murdock discloses that the 
Court there made no suggestion, by either holding or 
dictum, that "wilfully" insofar as it relates to failure 
to make a return, may be proved by anything less 
than a showing of mens rea, or a bad motive. 

In Murdock, the defendant was charged with a wil- 
ful failure to give information and the thrust of the 
opinion deals mth the defendant's failure to disclose 
the identity of the person to whom he claimed he 
made deductible payments. But because of the failure 
of the Court to otherwise caution, it would seem that 
the following language should be equally applicable 
to that portion of the section dealing with a wilful 
failure to make a return. The Court in. Murdock 
made these comments: 

"The Revenue Acts conmiand the citizen, where 
required by law or regulations, to pay the tax, to 
make a return, to keep records, and to supply in- 
formation for computation, assessment, or col- 
lection of the tax. He whose conduct is defined 
as criminal is one who Svilfully' fails to pay the 
tax, to make a return, to keep the required 
records, or to supply the needed information. 
Congress did not intend that a person, by reason 
of a bonafide mismiderstanding as to his liability 
for the tax, as to his duty to make the return, or 
as to the adequacy of the records he maintained, 
should become a criminal by his mere failure to 
measure up to the prescribed standard of con- 
duct. And the requirement that the omission of 



18 



these instances must be wilful, to be criminal, is 
persuasive that the same element is essential to 
the offense of failing to supply information." 
Vnited States i\ Murdoch (1933), 290 U.S. 389, 

395, 54 Sup. Ct. 223, 226, 78 L.ed. 381, 385. 

"Here we are concerned with a statute which de- 
nounces a wilful failure to do various things 
thought to be requisite to a proper administra- 
tion of the income tax law, and the goveriuuent 
in the trial below, we think correctly, assumed 
that it carried the burden of showing more than 
a mere voluntary failure to supply information, 
with intent in good faith, to exercise a privilege 
granted the witness by the Constitution. The re- 
spondent's refusal to answer was intentional and 
^^dthout legal justification, but the jury might 
nevertheless find that it was not prompted by 
bad faith or evil intent, which the statute makes 
an element of the offense." 

United States v. Murdoch (1933), 290 U.S. 389, 

396, 54 Sup. Ct. 223, 226, 78 L.ed. 381, 386. 

Counsel realizes that the foregoing language was 
used by the Court in Murdoch prmiarily with refer- 
ence to that violation dealing with the defendant's 
failure to incriminate himself by disclosing the iden- 
tity of the person to whom he had made the de- 
ductible payments ; however, by failure to distinguish 
the section involving a wilful failure to make a re- 
turn, the Court seems to make the foregoing language 
applicable to a wilful failure to make a return as 
well. In any event, Murdoch discloses no sound basis 



19 



for an inference that the Supreme Court intended 
that a wilful failure to make a return requires less 
than an evil intent or bad faith. Thus, to the extent 
that this Court's decision in Abdul rests on Murdoch, 
supra, its foundation is weakened. 

In Spies v. United States (1943), 317 U.S. 492, 63 
Sup. Ct. 364, 87 L.ed. 418, the defendant was charged 
with making a wilful attempt to evade or defeat a 
tax. Although the Court in Spies does use language 
by way of dictum suggestive of a distinction in the 
quantum of proof necessary to convict for the felony 
(attempt to evade or defeat a tax) and the misde- 
meanor (wilful failure to pay a tax or make a re- 
turn) a close analysis of Spies indicates clearly that 
that Court was concerned with the methods by which 
a tvilful attempt to defeat and evade might be proved. 
(Citing by way of illustration that a wilful attempt 
may be inferred from conduct such as keeping a 
double set of books, making false entries or alter- 
ations, or false invoices or docmnents, destruction of 
books or records, concealment of assets, of covering 
up sources of income, etc.) The Court in Spies does 
not suggest that a wilful failiu'e to file may be 
proved by a mere failure to file, or in the absence of 
mens rea or bad purpose. The Court merely points 
out: 

"Wilful but passive neglect of the statutory duty 
may constitute the lesser offense. ..." 

Spies V. United States (1943), 317 U.S. 492, 
499, 63 Sup. Ct. 364, 468, 87 L.ed. 418, 423 
(emphasis added). 



20 



"Mere voluntary and purposeful, as distingnishod 
from accidental omission to make a timely return 
might meet the test of wilfulnass." 

Spies V. United States (1943), 317 U.S. 492, 
498, 63 Sup. Ct. 364, 367, 87 L.ed. 418, 422 
(emphasis added). 

It is submitted that the distinction between wilful- 
ness as used in the felony section and wilfulness as 
used in the misdemeanor section lies, as stated supra, 
page 15 herein in United States v. Vitiello (3rd Cir. 
1966) 363 F.2d 240, in the additional misconduct 
which is essential to the violation of the felony 
statute, and not in the quality of ivilfulness ivhich 
characterizes wrongdoing. For his failure to file and 
pay the tax when due, appellant herein has paid to 
the Government all penalties and interests demanded. 
(B.T. 16:13.) It seems one thing for the Govei-nment 
to exact penalties and interest for a "mere failure 
to measure up to the prescribed standard of conduct" 
(United States v. Murdoch, supra), or for failure "to 
observe statutory duties to make timely returns" 
(Spies V. United States, supra), and quite another to 
make the citizen who has maintained precise and ac- 
ciu'ate records a criminal by reason of a mere failure 
to file, without any showing whatever of a criminal 
intent, or mens rea that is normally foimd in any 
crime for which a person is to be subjected to punish- 
ment. The Revenue Agents here were unable to find 
any bad motive or evidence of evil intent on the part 
of the appellant other than the faihire to file a re- 
turn. (R.T. 29:1-18.) Even during the period that 



21 



the appellant failed to file, lie was nevertheless 
making- proper reports concerning income tax and 
withholding tax for employees and employees' con- 
tributions (R.T. 25:10), and had an employer's ac- 
comit number (R.T. 25:15). These factors alone 
indicate an absence of a plan to avoid filing at all; 
and this is the true reason for the criminal punish- 
ment. It is unjust to fix criminal sanctions and a 
criminal record on a responsible citizen whose failure 
arose sunply from a series of circumstances that 
made it impossible for him to both file the tax when 
due and continue to handle clients' affairs. 

Finally, unless the word "wilfully" was intended by 
Congress to mean something more than a mere failure 
to file, there is little reason for its inclusion in § 7203, 
for the same purpose would be served by its deletion. 

D. Refusal to Permit Trial Counsel to Inspect the Probation 
Report Is a Denial of Effective Aid of Counsel. 

In Verdugo v. United States of America (9th Cir. 
decided May 16, 1968) No. 20803; amended opinion 
filed October 7, 1968, it was determined that consid- 
eration by the Court of a probation report containing 
information that had been excluded at trial and was 
prejudicial was reversible error. In Verdugo, this 
Court noted that coimsel's argument to the effect that 
the accused's right to "make a statement in his own 
behalf and to present any information in mitigation 
of punishment" (Rule 32(a), Fed. R. Crim. P.) was 
of little value without knowledge of the allegations in 
the presentence report had force and that the au- 
thorities provided no ready answer. 



22 



It is api^ellant's contention here tliat the rule of 
Verdufjo should ])e applied and that reversal is re- 
quired to permit appeUant's counsel to inspect the 
presentence report. 

In advancing this point, appellant does not suggest 
that harmful material tvas presented to the trial 
Court; only that the right of trial coimsel to inspect 
the presentence report in every instance should be 
made clear, as a requirement of effective aid of 
counsel. 



CONCLUSION 

It is not necessary m order to reverse this con- 
Adction, for this Court to wholly adopt the reasoning 
of the Third Circuit, nor to establish a rigid defini- 
tion of wilfulness as applied to Section 7203. It is 
enough to perceive that under the facts of this case, 
where no more was shown by the Goverimient than a 
mere failure to file a return, an adequate showing of 
wilfubiess has not been made. 

If a distinction between the felony and misde 
meanor section meanings of wilfulness is to be mad^ 
that distinction should go to the additioyial miscoi 
duct which is essential to the violation of the felony 
statute, and not to the quality of wilfulness whicli 
characterizes ivrongdoing. 

Unless the word wilfulness comports some bad pur- 
pose, there is no logical reason for its placement in 



23 

Section 7203, and the crime should be complete 
merelj^ on failure to file. 

The judgment should be reversed. 

Dated, San Francisco, California, 
October 29, 1968. 

Respectfully submitted, 
Dennis L. Woodman, 
Lin B. Densmore, 
By Lin B. Densmore, 

Attorneys for Appellant. 



^B^ 



IN THE UNITED STATES COURT OF APPEALS 

POT' "^'TT^'' TTT'-^rpjT j^jp^y^jrji ''iMf^ I 



■/YATT ST. B. TnTTHT- 

Appellant J 
V . 
UNITED STATES OF AMERICA, 

AP; 



BRIEF OP APPEDLEE 
UNITED STATES OP m^PJ.Ci^ 



J 



My •• ^-r^rl ^ "!• n f-, o c; -f- tn 



F. STEELE LMGFORD 
Assistant United Statec 

JERROLD M. LADAJ.^ 

Assistant United States Atto 

Chief, Crim Division 

Attorneys ..jpellee 

United States of America 



SUBJECT INDEX 

Pages 

I. ISSUES PRESENTED FOR REVIEVJ 1 

II. STATEMENT OF TxHE CASE 2 

III . ARGUl.lENT h 

A 4 

B 7 

CONCLUSION 9 



TABLE OF AUTHORITIES 
Table of Cases 



Pages 



bdu3- V. United States 

5^F. 2d 292 (1958) 6 

itman v. United States 

^TTTT 2d 20b (1957) 7 

art in v. United States 

lf~F7 2d 753 (19^3) 6 

erdggo v. United States , _^*2d____ , 

o. 20.803 (9th Cir. October 17, I968) 7, 8 



STATUTES 

hi ted States Code 

Title 18, Section 1291 2 

Section 3231 2 

Title 26, Section 7203 1, 2 



IN THE UNITED STATES COURT OF APPEALS 
FOR THE NINTH CIRCUIT 



NO. 22,809 



WYATT ST. B. EUSTIS, JR., 

Appellant, 

V . 

B RIEF OF APPELLEE 
UNITED STATES OF Al-IERICA, ) UNITED STATES 

Appellee . 



I. 

ISSUES PR E SENTED FOR REVIEI^J 

1. Was the evidence sufficient to sustain a 
finding that appellant's failure to file income tax 
returns for several successive years was v;ilful 
within the meaning of Title 26, United States Code 
Section 7203? 

2. Did appellant and his counsel waive any 
right to inspect the presentence report? 



-1- 



II 

STATET-IENT OF THE CASE 

The Nature of the Case ; A criminal information was 
filed against appellant on October 11^ 1967, for 
failure to file income tax returns for the years 
1962, 1963 and 196^^ in violation of 26 U.S.C. §7203. 
A jury V7as waived and the appellant proceeded to trial 
on February 8^ I968 before the Honorable William T. 
Sweigert . Appellant v:as represented by retained 
counselj Dennis L. Woodman. At the close of the 
evidence the Court found the appellant guilty on all 
counts. On March 5j 19S8j appellajit v/as sentenced to 
a term of one year^ all of which was suspended except 
for three m.onthSj and was ordered to pay a fine of 
$8^000 on each county same to be concurrent on all 
counts. Execution of sentence was stayed until May Ij 
1968. On March 12, I968, Notice of Appeal was filed. - 



1/ Jurisdiction in the District Court was predicated 
upon 18 U.S.C. §3231. Jurisdiction on appeal is 
invoked under 18 U.S.C. §1291. 



-2- 



statement of Facts : The appellant ^ a public ac- 
countant V7ith long experience in tax matters ^ ad- 
mitted to agents of the Internal Revenue Service 
when contacted in February of I966 that he had not 
filed income tax returns since I956. — Appellant 
also advised the agents that for the years 1959 to 
1964 he sought no extensions of time within v;hich 
to file J although he vjas aware of the existence of 
such procedure^ since he had filed for and received 

extensions v/ithin v/hich to file his 1957 and I958 

3/ 

income tax returns. — Appellant testified that he 

had not filed timely returns due to the press of 
business. -- Appellant further testified that after 
receiving extensions with respect to his 1957 and 1958 
returns J he decided thereafter not to bother v^ith 

extensions because they v;ere "trouble" and he v/ould 

5/ 

rather pay the penalties and Interest. — 



£/ Recordj p. 11. 

It v;as stj.pulated^ for purposes of the trial, 
that Eustis v/as required by law to file a 
timely Federal tax return each year and that 
he knew he v/as required to do so each year. 

3/ Record, pp. 13-l4. 

4/ Record, p. 33- 

"5/ Record, p. l4. 

-3- 



In February, I966 Eustis v/as first con- 
tacted ty agents of the Internal Revenue Service who 
were investigating his filing delinquencies. At the 
next meeting between the agents and the appellant, he 
presented to them completed Federal income tax returns 
for the years I957 to 1964, vrhich he stated had been 

prepared within the three-v;eek interval since the 

6/ 

prior meeting.- Appellant testified that he had also 

prepared and filed within that same three-v/eek period 
all of his State income ta.x returns for the sarae 
delinquent years . jjj 

ARGUIvlENT 
A. 
The single issue before the District Court 
v/as v/hether the appellant's failure to file timely 

Federal income tax returns for each of the years 195^ 

8/ 
through 1964 V7as v/ilful. "" Having v/aived a jury 



6/ Record, p. 40. 

7/ Record, p. 42. 

8/ The second issue before this Court arose 
subsequent to conviction, and concerns 
whether the District Court should have 
provided defense counsel v/ith the pre- 
sentence report, absent a request for same 

-4- 



and presented the matter to the District Court for 
trial, the appellant stipulated that he had been 
required to file timely income tajc returns for each 
of said years; that he had been av/are that he had 
received sufficient income during said years as to 
require the timely filing of such returns; but that 
he had not timely filed such returns . Upon such 
stipulation J the Government's evidence, and the 
testimony of the appellant, the Court found that 
Eustis had deliberately and intentionally failed to 
timely file the mentioned tax returns, and accordingly, 
a verdict of guilty was entered as to all counts. 

The Court's decision was based upon evidence 
of facts and circumstances from which the inference 
could reasonably be dravm that appellant's failure to 
file such timely returns v;as wilful. 

During the years in v/hich appellant did not 
in fact make timely filings of his income tax returns, 
he maintained an active practice as a public account- 
ant, wherein he was particularly concerned v:ith the 
handling of the business and tax affairs of his 
particular clients. It was during this period that 



-5- 



fr 



he filed neither Federal nor State income tax returns 
for eight consecutive years. 

Appellant claimed that the press of busi- 
ness affairs J particularly those of attending to the 
personal business 8.nd tax affairs of his clients, 
precluded him from the preparation and filing of his 
ovm individual tax returns. Yet, the evidence demon- 
strated that within three v/eeks from the time he vms 
initially contacted by agents of the Internal Revenue 
Service, the appellant prepared both his Federal 
and State income tax returns for all eight years. 

The defendant argued to the District Court 
that at best or v/orst his failure to file timely tax 
returns was negligent, and should be characterized 
in the fairy tale context of the "barefoot shoe- 
maker's daughter". In light of all the evidence on 
the issue of wilfulness and intent, the District Court 
properly rejected this excuse of characterization. 

This Court has passed upon the question of 
intent in comparable prosecutions of failure to file 
cases. Abdul v. United States (9th Cir. 1958), 25^ F.2d 
292, 8Jid Martin v. United St ates (9th Cir. I963), 
317 F.2d 753. The standards stated therein are 



-6- 



9/ 

applicable to the record in the instant matter. "" 

The protracted failure to file income tax 
returns over a period of eight consecutive years v;as 
sufficient to support the Court's finding that the 
conduct and intent of the appellant v/as wilful in 
respect to each count upon v/hich he was found guilty. 
Litmaji v. United States j (3rd Cir. 1957), 246 F.2d 
206, 208. 

Put simply, notwithstanding his background, 
training and professional practice, the appellant 
deliberately and openly chose on repeated occasions 
to delay indefinitely the filing of his own income 
tax returns, for personal reasons and motives. 

B. 

Counsel for defendant argues that this 
matter should novj be returned to the District Court 
to afford him the opportunity of reviev^ing the pre- 
sentence report, citing for this proposition Verdugo 



9/ The cases of other Circuits and District Courts 
*" cited and urged upon this Court by appellant 

may be of academic interest; hov/ever, the hold- 
ings therein are not subscribed to by appellee, 
nor considered appropriate or controlling in 
this Circuit. 



-7- 



V. United States of Anierica , (9th Cir., decided 
May 16, 1968, No. 20803; amended opinion filed 
Octoter 17, 1968), (_^ F.2d ). 

The circumstances concerning the preparation^ 
contents and employment of the presentence report 
with v;hich the Court v;as concerned in Verdugo are 
peculiar to that case, and tear no similarity to the 
posture of the presentence report concerned in this 
case . 

Interestingly, in Verdugo this Court com- 
mented (footnote 17) that due to the particular 
circumstances of that case it v/as "unnecessary to 
consider v/hether Verdugo 's claim should be rejected, 
because his counsel failed to request the trial 
judge to disclose the report after having been re- 
fused access to the report by the probation officer." 

Unlike the situation in Verdugo , counsel 
for the defendant in this case discussed the pre- 
sentence report v/ith the probation officer, and v/as 
advised by both the probation officer and the Court 
at the time of sentence that there v/as "nothing con- 
troversial" or involving "moral turpitude" with which 
to be concerned. —~ In light of these circumstances. 



10/ Record, pp. 60, 65. 

-8- 



appellee submits that appellant v/aived any right to 
inspect the presentence report. 

CONCLUSION 
The Government's evidence shov/ed more than 
a "mere failure to file a return" by appellant. The 
Governraent shov;ed that the appellant deliberately made 
the decision to forego the filing of timely income 
tax returns for several successive years at the cal- 
culated risk of paying penalties and interest. The 
Government's evidence further shov/ed that despite the 
availability of records vjhich v/ould have permitted 
the appellajit to have filed such returns , it v;as only 
after the appearance of the Govemm.ent's agents that 
appellant hastily prepared and filed such returns . 
In short J the evidence depicts an individual well 
versed in tax matters j particularly with respect to 
the preparation and filing of income tax returns ^ 
who deliberately took calculated risks in respect 
to the non-filing of his own tax returns. Surely^ 
such deliberate calculation can only be characterized 
as v;ilful. 



-9- 



affirmed. 



Accordingly, the judgment should te 



Respectfully submitted, 

CECIL F. POOLE 

United States Attornev 



'/- i/)^<^^^ r^C<'^/^ 




Assistant United States Attorney 



JEKKOLD M. LAI)AR' 





Assistant United States Attorney 
'Chief J Criminal Division 

/ 



Dated: January 9/ I969 



-10- 



CERTIFICATE OF SERVICE BY KPSL 

This is to certify that tv/o copies of 
the foregoing Brief of Appellee^ United States of 
America^ was this date forv/arded ty Certified Mailj 
Return Receipt requested^ to the Attorney for the 
Appellant J 



LIN B. DENSMORE^ Esq. 

Dennis L. Woodman 

Lin B. Densmore 

343 Sansome Street - Tenth Floor 

San FrajiciscOj California 94104 



P. STEELE LANOt'OITD 7^ 




Assistant United States Attorney 



DATED: January 9, I969 . 



Wyatt St. B. Eustis^ Jr. 
V. United States of America 
C. A. 9t-h No. 22,809 
Criminal No. 41577, 
USDC, ND California. 



No. 22.810 



INTHE 



fnited States Court of Appeals 

For the Ninth Circuit 



{LAV P. TTamt>ow and Henry Rapoport, 

Plaiv tiffs- A frpcV-" ' ^ 

vs. 

lENTiFic Glass Apparatits Corp., a coipo ra- 
tion, and RiNCO Instruments Company, Inc., 

a corporation, 

D efeMdan ts-A pp ellees . 



Appeal from the United States District Court 
for the Central District of California 

BRIEF FOR DEFENDANTSAPPELLEES 



|ernard Kriegel, 

6606 Wilshire Boulevard, 
Loe Angeles, California 90048, 
Telephone: (2U) 653-0332, 

^ELLIN, HaNSCOM & HuRSH, 
SCAB A. MeLLIN, 

ISLE M. Moore, v'^,," 

11 Sutter street, 
San Francisco, California 94104, 
Telephone: (415) 362-7765, 

Attorneys for Defendants-Appellees 



FiL 



tZn UJ 



'CUNAU-WALSH PRINTINS CO.. SAM rffANCISCO 



Subject Index 



Page 
[ntroduction 1 

Counterstatement of the ease 2 

Summary of argument 5 

Argument 6 

The claim of the patent in suit does not meet the statu- 
tory test of validity set foi-th in 35 U.S.C. § 103 6 

The Craig rotary evaporator 7 

Teflon-glass laboratorj^ stopcocks 7 

Buchler patent No. 2,865,445 11 

The Hormuth (Bemauer) rotary evaporator 11 

The German Gebrauchsmuster No. 1,752,622 is a patent 
of a foreign country within the meaning and intent of 
35 U.S.C. §§ 102(a) and 102(b) and is prior art in 
this action to be considered in a determination of 
obviousness under 35 U.S.C. § 103 15 

The claim of the patent in suit is plainly obvious in 
light of the prior art 18 

The prior public use of the Hormuth Rotary Evaporator 

by Dr. Cava invalidates the patent under 35 U.S.C. 

§ 102(b) 21 

The most pertinent prior art was not considered by the 

patent office 23 

Plaintiffs' patented device was in prior public use at the 

University of California 24 

There is no infringement in the present case 30 

Conclusion 34 



Table of Authorities Cited 



Cases Page 

Aluminum Extnision Company v. Soule Steel Company, 260 
F.Supp. 221 (D.C. CD. Calif., 1966) 33 

American Infra-Red Radiant Co. v. Lambert Industries, 
Inc. (8 Cir. 1966) 360 P.2d 977 17 



ii Table of Authorities Cited 

Pages 

Application of Faster, 343 F.2d 980 (CCPA, 1965) cert. 

den. 383 U.S. 966 (1966) 8 

Arc IVIfg. Co. V. Convertible Top Replacement Co., 365 U.S. 

336(1961) 33 

Cataphotc Corporation v. De Soto Chemical Coatings, Inc., 
356 F.2d 24 (9th Cir., 1966) 22, 25 

Egbert v. Lippmann, 104 U.S. 333, 26 L.Ed. 755 (1881) .... 25 
Elizabeth v. Pavement Co., 97 U.S. 126, 24 li.Ed. 1007 
(1877) 26 

Hazeltine Research Co. v. Brenner, 382 U.S. 252 (1965) ... . 8 

Nelson v. Batson, 322 F.2d 132 (9th Cir., 1963) 33 

Randolph v. AUis-Chalmers Mfg. Co., 264 F.2d 533 (7th 
Cir., 1959) 26 

Super Mold v. Clapps Equipment, 397 F.2d 932, 158 USPQ 
527 (9th Cir., 1968) 25 

Tool Research and Engineering Corp. v. Honeor Coi-p., 
367 F.2d 449 (9th Cir., 1966) 22, 25 



Statutes 

35 U.S.C: 

Section 102(a) 15, 17 

Section 102(b) 15, 17, 21, 25, 29 

Section 102(d) 17 

Section 103 6, 9, 15, 17 

Section 271(b) 33 

Section 271(c) 33 



I 



Rules 

Federal Rules of Civil Procedure: 

Rule 52(a) 32 

Official rJazette of the United States Patent Office, Vol. 820, 
Number 1 (Nov. 2, 1965) (Exhibit Y) 15 



No. 22,810 
IN THE 

United States Court of Appeals 
For the Ninth Circuit 



Sarlan p. Hamlow and Henry Rapoport, 

Plaintiff s-Appellafits , 

vs. 

Scientific Glass Apparatus Corp., a corpora- 
tion, and RiNCO Instruments Company, Inc., 

a corporation, 

Defendants-Appellees. 



Appeal from the United States District Court 
for the Central District of California 

BRIEF FOR DEFEISDANTS=APPELLEES 



INTRODUCTION 

The parties will be referred to herein as "plaintiffs'" 
)r "defendants", as in the trial court. The plaintiffs are 
;he appellants herein, and the defendants are the ap- 
pellees. 

For the Court's convenience, defendants will use the 
same record designation selected by plaintiffs, viz., "T." 
for the clerk's transcript or original papers filed in the 
District Court, and "R." for the reporter's transcript of 
the trial proceedings. 



COUNTERSTATEMENT OF THE CASE 

This is an action for the infringement of the single 
claim of the Hamlow and Rapoport patent No. 3,219,099. 

"The patent in suit is directed to a rotary evapora^ 
tor, which is a piece of laboratory equipment used m 
chemistry laboratories for evaporating li(|uids. In 
general, such rotary evaporators comprise a glass 
flask into which the liquid to be evaporated is placed. 
A hollow shaft having a tapered end fits into the flask 
in airtight engagement therewith. The other end of 
the shaft has an airtight rotary engagement with a 
stationary glass tubing which is connected to a source 
of low pressure such as a vacuum pmnp. In oper- 
ation, the flask and shaft are rotated as a unit about 
the axis of the shaft so that the liquid in the flask 
will form a thin fibn on the inside of the flask. Heat 
is applied to the flask and the evaporated liquid is 
draAvn off through the shaft and the stationaiy glass 
tubing. ' ' 

(Finding of Fact 14, T. 51.) _ 

Rotary evaporators as just described were well known 
prior to plaintiff's invention. (Finding of Fact 15, T. 51.) 

The history of rotaxy evaporators has a relatively 
recent origin, a rotary evaporator being first suggested 
in 1950 in an article by Craig. (Exhibit D.) In the Craig 
article, the hollow rotating shaft was made of glass and 
had one end thereof in airtight engagement with a glass 
flask. The other end of the hollow shaft and the stationary 
glass tubing were connected together by a ball-and-socket 
joint which was greased to make it airtight. Dr. Dreiding 
was questioned (R. 350-355) as to the construction of the 
Craig device vnth. relation to the elements and limitations 
of the claim in suit. To summarize his testiuiony, the 



claim is set forth below with those portions of the claim 
not fomid in Craig indicated in brackets and bold face 
print and with the italicized portions added to the claim 
to describe the Craig device. Dr. Dreiding testified that 
the Craig article (Exhibit D) is an: 

"Apparatus for separating and removing volatile 
substances from a composition, in combination 

a housing, 

a shaft made of [polyfluoro vinyl resin] glass ro- 
tatably mounted in said housing and with both 
of its ends extending beyond the limits of said 
housing, 

said shaft having a passage of substantially uni- 
form diameter extending axially through the 
entire length thereof, 

said shaft having one end thereof removably se- 
curing a flask in airtight engagement for rotation 
therewith, 

said shaft having its opposite end formed as the 
ball portion of a ball and socket joint, 

a separately mounted glass fixed member, having 
an axial passage therethrough of substantially 
the same diameter 

tenninating with the socket portion of the ball and 
socket joint rotatably receiving and seating the 
said ball portion of said shaft in airtight [self- 
lubricating] engagement and with their respec- 
tive passages in alignment, 

exhaust means conmiunicating with the passage in 
said fixed member connected to a source of low 
pressure, and 

drive means mounted [in] outside said housing for 
rotating said shaft." 



As is abundantly clear, the difference between the 
claimed invention and the first prior art rotary evapora- 
tor is that the Craig glass shaft with its hall member of 
a ball-and-socket joint on one end thereof Jias been re- 
lAaced by a correspondingly shaped Teflon shaft. This in 
turn changes the ball-and-socket joint from a greased 
glass-to-glass connection to a self-lubricating Teflon-to- 
glass connection. 

(The Craig device also differs from the claimed inven- 
tion in that the drive means, or motor, of Craig is outside 
the housing, rather than i/nside, as specified in the claim, 
but plaintiffs do not assert this to be a difference of any 
substance.) 

Plaintiffs made this change for the following reasons. 
Glass-to-glass rotating connections, such as in the Craig 
device, require the use of a grease lubricant in order to 
obtain an airtight seal. However, the use of such grease 
can be undesirable because the grease will be exposed to 
and contaminate the substance inside the device which is 
being evaporated. (Patent in suit. Exhibit 1.) Plaintiffs 
wished to avoid the use of contaminating grease (K. 116) 
in their rotary evaporator and achieved this by using a 
Teflon shaft. With its Teflon-to-glass connections to the 
flask and fixed glass member, because a Teflon-to-glass 
connection is self-lubricating and requires no other lubri- 
cant to form an airtight seal (R. 21). 

Plaintiffs also desired to prevent any contamination of 
the material being evaporated which might result from 
corrosion. Accordingly, their rotary evaporator was de- 
signed not to liave any metal parts exjDosed to the ma- 
terial being evaporated. (R. 25.) 



Plaintiffs' rotary evaporator does work. However: 
' ' The combination of elements set forth in the claim 
of the patent in suit does not accomplish any result 
that is unusual, imohvious, surprising or unexpected. 
Instead, the results of such combination of elements 
are those which arise by virtue of the inherent prop- 
erties of glass and Teflon and glass-Teflon combina- 
tions, wliich properties were weU known at the time 
of the invention of the patent in suit." 
(Finding of Fact 27, T. 55.) 



SUMMARY OF ARGUMENT 
The main question presented here on appeal can be 
stated as follows: 

Is it patentable invention to modify an old rotary 
evaporator by making the hollow shaft out of Teflon, in- 
stead of glass, in order to obtain the well-known advan- 
tages of Teflon? 

The prior art shows plainly that it is not. After the 
original 1950 disclosure by Craig of a rotary evaporator, 
the prior art showed : the use of a Teflon-glass ball joint 
in a rotary evaporator (but not in a location designed 
to prevent contamination) with a recognition that it 
formed a self -lubricating airtight seal; the recognition 
that grease in a glass-to-glass connection could be a 
source of contamination and that this could be overcome 
by use of a Teflon-to-glass connection ; the use of a Teflon- 
Teflon baU joint in a rotary evaporator (at the same lo- 
cation as in the patent in suit) to form a self -lubricating 
airtight seal; the construction of rotary evaporators with- 
out any metal parts therein that could be subject to 
corrosion. 



Tlie patent in suit shows merely an obvious assemblage 
of old concepts and elements to acliieve expected results. 

Further, the patent is invalid because of the public use 
of plaintiffs' devices at the University of California more 
than one year prior to the filing of the application. 

There is no infringement here. In addition to the 
reasons assigned by the trial court, defendants do not 
make or sell the entire combination of elements set forth 
in the claim. There is no evidence that the entire com- 
bination has been used. Accordingly, there can be no 
liability for contributory infringement or for inducing to 
infringe, since there is no proof of direct infringement. 



ARGUMENT 

THE CLAIM OF THE PATENT IN SUIT DOES NOT MEET THE 
STATUTORY TEST OF VALIDITY SET FORTH IN 35 U.S.C. 
§103. 

Plaintiffs admit in their opening brief (page 11) that 
the "differences over the prior art do not appear to be 
giant strides". With tliis we agree. In view of the prior 
art here, we submit that the differences are virtually non- 
existent. 

The principal prior art in this case is as folloAvs : 

The Craig rotary evaporator 

Teflon-glass laboratory stojjcocks 

Buchler patent No. 2,865,445 

The Honnuth (Beniauer) rotary evaporator 



The Craig rotary evaporator 

This device, Exliibit D, has already been discussed 
above. Again, the only difference between the claimed in- 
vention and Craig is the use of a Teflon (instead of glass) 
shaft with a self-lubricated Teflon-glass ball-and-socket 
joint. It should also be noted that the Craig device does 
not have any metal parts which are exposed to the inside 
of the device and which might be subject to corrosion. 

The Craig article, Exhibit D, was not considered by the 
Patent Office. 



Teflon-glass laboratory stopcocks 

These devices are shown in the Birchall patent No. 
2,876,985 (Exhibit A-6) and in the 1956 advertisements of 
Fischer & Porter Co. (Exhibits S and T). Findings of 
Fact No. 18 (T. 52) smmnarizes the teachings of these 
stopcocks : 

''The prior art Birchall patent No. 2,876,985 shoAvs 
a laboratory stopcock ha\dng a tapered Teflon plug 
fitting in a tapered glass seat and rotatable therein. 
The Birchall patent specifically recognizes that ro- 
tating glass-to-glass connections require the use of 
grease or other lubricants which can cause contamina- 
tion of fluids passing therethrough and that such con- 
tamination can be avoided by the substitution of a 
Teflon plug in place of the previously used glass 
plugs. The Birchall Teflon-glass stopcock is airtight 
and self -lubricating. The advertisements for these 
Teflon-glass stopcocks (Exhibits S and T) stress the 
points that there is no product contamination result- 
ing from the use thereof, and that such devices may 
be used over a wide range of temperatures." 



8 



Thus, tliis prior art plainly teaches that contamination 
may result from a greased glass-to-glass connection, and 
that such contamination can be avoided by replacing one 
of the elements with Teflon. 

Neither the Birchall patent nor the Fischer & Porter 
advertisements were considered by the Patent Office. 

Plaintiffs attempt to avoid the disclosure of the Birchall 
patent by noting that it did not issue until some ten 
months after plaintiffs made their invention. This, of 
course, is true. Plaintiffs then argue, "Therefore regard- 
less of what it shows it cannot speak as of the date of 
Plaintiffs' invention which was April 24, 1958 * * *. Ac- 
cordingly, it cannot be relied upon to invalidate the 
patent in suit under §103". (Opening brief, page 30.) 

No authority is cited for this statement of law. This 
is not surprising, because the statement is absolutely in- 
correct. 

In the first place, the Birchall patent issued on ^larch 
10, 1959, over two years before plaintiffs filed their ap- 
plication. As such, the disclosure of the Birchall patent 
may be considered in determining whether or not the 
present patent in suit discloses an unobvious improve- 
ment, even if the Birchall invention was made after j^lain- 
tiffs' invention. Application of Foster, 343 F.2d 980 
(CCPA, 1965), cert. den. 383 U.S. 966 (1966). 

In the second place, the application for the BirchaU 
patent was filed on June 22, 1955, ahnost three years be- 
fore plaintiffs' 1958 date of invention. In Hazeltine Re- 
search Co. r. Brenner, 382 U.S. 252 (1965), the Supreme 
Court ruled specifically that a patent speaks as of its 



filmg date and is part of the "prior art" at tliat time as 
that term is used in 35 U.S.C. § 103. Accordingly, the 
Birchall patent is prior art here for all purposes. 

(It is noted that plaintiffs also dispose of the Ueber- 
wasser patent No. 3,034,573 on the ground that it was 
based upon a French patent which issued in 1959 after 
plaintiffs' 1958 date of invention and that "therefore it 
cannot speak with respect to anything obvious at the time 
Plaintiffs made their invention, as required under § 103". 
(Opening brief, page 31.) However, the Ueberwasser 
patent No. 3,034,573 was filed on March 28, 1958, before 
plaintiffs' mvewtion. Accordingly, under the specific ruling 
of HazelUne, the Ueberwasser patent is prior art under 

no3.) 

It may be that plaintiffs' complete misunderstanding 
of the law on the applicability of prior art is the chief 
reason why this appeal has been pursued. 

Plaintiffs also assert that laboratory stopcocks do not 
"relate to rotary evaporators and must therefore be con- 
sidered non-analogous art" (Opening brief, p. 30.) 

This contention is manifestly incorrect. Plaintiffs' Ex- 
hibit 9 is a catalog sheet for plaintiffs' commercial rotary 
evaporator. The front cover has a photograph of the 
rotary evaporator set up for operation, with two stop- 
cocks being used. The price list on the rear of Exhibit 9 
shows that the $214.78 price for the apparatus includes a 
stopcock, and that for $3.95 additional a "stopcock with. 
Teflon plug instead of glass" will be supplied. If plain- 
tiffs sell a Teflon plug stopcock with their rotary evapo- 
rator, how can they now assert that such stopcocks are 
"non-analogous"? 



10 



Furtliennore, Dr. Rapoport, one of the co-inventors of 
the i>atent in suit, testified : 

"Q. How long have you known of the use of stop- 
cocks Avith Teflon plugs? 
*'A. Oh, ten years I would say. 
"Q. That would take you back to 1957 or so? 
"A. Yes." 

(R. 118.) 

# # * 

*'Q. What is the purpose of using a Teflon plug 
in a stopcock? 

"A. To avoid lubricant that you would use if you 
had a glass on glass, that you would need if you had 
glass on glass. 

"Q. Did you realize this back in 1957? 

"A. Yes, this is well known. 

"Q. Would that prevent contamination of products 
passing through the stopcock? 

''A. Yes. 

"Q. The same as in your device it prevents con- 
tamination of fluid passing through the Teflon shaft 
because there is no grease; is that correct? 

"A. If the materials do not react with Teflon, 
and most materials do not, then there would not be 
any contamination from a Teflon plug in a glass 
barrel type stopcock. 

"Q. Teflon is Teflon, is it not? The Teflon that 
would be used in the sto]>cock is the same material 
as the Teflon used in your rotary evaporator? 

"A. That would be my assmnption." 

(R. 121-122.) 



11 



Buchler patent No. 2,865,445 

This patent to a rotaiy evaporator was considered by 
the Patent Office, and discloses a ball-and-socket rotary 
joint in which the ball member 29 is glass and the socket 
member 30 is Teflon. The Buchler patent states with 
reference to this Teflon-glass ball joint: 

a* * * j^^gjj^ijgj. 30 may consist of plastic material, 
preferably tetraflnoromethane pol^iner ('Teflon') 
which has been fomid to give a smooth yet airtight 
seal against glass; the highly passive surface of this 
material, which appears to the touch as though coated 
with a film of oil, enables its use without any sealing 
compound when applied against a smo'oth-surfaced 
object." 

The Buchler patent was considered by the Patent 
Office. However, this patent does not discuss the prob- 
lems of contamination in rotary evaporators and does not 
use the self-lubricating Teflon-glass ball joint for the pre- 
vention of contamination. 

In 1954, when the Buchlei- patent was filed, it may be 
that Buchler did not recognize that lubricating grease 
could be a source of contamination in laboratory equip- 
ment or that his self-lubricating Teflon-glass ball joint 
could be used to avoid such problems. However, this con- 
cept was certainly recognized by Birchall in 1955 and was 
well known by 1957. (R. 121.) 

The Hormuth (Bemauer) rotary evaporator 

Many of the exhibits in the present case pertain to 
the rotary evaporator developed by Dr. Bemauer of Swit- 
zerland and manufactured by L. Hormuth Company of 
Grermany. 



12 



The earliest prior art exhibit relating to this device is 
the German Gebrauclismuster (utility model) No. 1,752,622 
(P^xliibit R), entered September 19, 1957 to L. Ilormuth 
Company. The drawing from this patent is in Api>endix: 
C of plaintiffs' opening brief. 

The Hormuth rotary evaporator has a hollow glass 
shaft g mounted for rotation A\ith its lower end and 
making a tapered connection with the glass flask. A Teflon 
member h makes a non-rotating tapered connection to the 
upper end of the glass shaft g, and the upper end of the 
Teflon member h forms a ball received A\dthin the socket 
portion of fixed Teflon member j. Thus, the rotating ball 
joint of the Hormuth evaporator has a Teflon-to-Teflon 
contact. There are no metal parts subject to corrosion by 
the material being evaporated. 

The next prior art reference to the Honnuth evaporator 
is found in the 1958 Houben-Weyl publication. (Exhibit 
P and translation. Exhibit P-1.) In a discussion of the 
operation of a rotary evaporator having a glass-to-glass 
ball-and-socket rotary joint, the Houben-Weyl publication 
states : 

**An apparatus which, because of its simplicity, is 
very useful for the laboratory in the rotary evapo- 
rator." The principle is shown in Fig. 5. 

"The li{iuid is evaporated from the round bottom 
flasks and can be added continuously from a drop- 
ping funnel. The flask b is rotated so that a thin layer 
of liquid Avith a large surface is fonned. This film 
evaporates at a suitable temperature without boiling. 
The weakest point is the halljoint bearing e as indi- 
cated hi) numerous suggestions for improvement in 
the literature. More recently the halljoint is made of 



13 



Teflon, which gives a tight joint and needs no luhri- 
cation.- 



"2Aeeording to a private commimication from K. Bernauer, 
Institute of Chemistry of the University of Zurich, this 
evaporator is manufactured in Germany by the firm of L. 
Hormuth, Propr. W. E. Vetter, Heidelberg, and in Switzer- 
land by the firm of A. Dumas, Zurich." (Emphasis added.) 

Exhibit Q is a printed brochure of the Hormuth evap- 
orator which was printed prior to August of 1859. (Find- 
ing of Fact 19 (T. 53).) This publication shows a photo- 
graph of the Homiuth rotary evaporator and states: 
'^ Teflon-Ball joint connection 

Between the intensity condenser and the rotating 
glass parts; tight without lubrication — resistant to 
high temperatures and to chemical reagents." 

The Hormuth rotaiy evaporator has also been used in 
this country more than a year prior to the filing date of 
the patent in suit, as set forth in Finding of Fact 20 (T. 
53): 

*'In the sununer of 1959, Dr. Michael P. Cava, then 
a Professor of chemistry at Ohio State University, 
Columbus, Ohio, was at the University of Zurich in 
Zurich, Switzerland. While there, he saw in Dr. K. 
Bernauer's laboratory a rotary evaporator as de- 
scribed in Finding No. 19, and arranged for the pur- 
chase of one of such evaporators from the L. Hor- 
muth Company. Such evaporator was received by Dr. 
Cava at Ohio State University no later than January 
of 1960. Such evaporator was as shown and described 
in the German Gebrauchsmuster No. 1,752,622 (Exhibit 
R) and the L. Hormuth brochure (Exhibit Q). This 
Hormuth evaporator was put to public use at Ohio 
State University more than one year prior to the 



14 



August 11, 1961 filing date of tho i>atent here in suit. 
The Hormuth evaporator was used extensively for a 
period of several years. Dr. Cava recognized that the 
use of grease or other lubricant could result in prod- 
uct contamination and for that reason no such con- 
taminating grease or other lubricant was ever used on 
the Teflon ball joint connection oi- the glass shaft-to- 
flask connection of the Hormuth evaporator." 

The trial court compared the Hormuth rotary evap- 
orator with plaintiffs' device and found as follows in 
Finding of Fact 21 (T. 54) : 

"The Hormuth evaporator, illustrated and de- 
scribed in Exhibits P, Q and R, and used at Ohio 
State University, is an evaporator in which there are 
no metal parts in contact with the fluids therein and 
is accordingly corrosion-free, and also is a rotary 
evaporator in which no contaminating grease or other 
lubricant was used. Such evaporator fulfills the func- 
tions that were stated by plaintiffs to be new in their 
rotary evaporator at pages 44, 45 and 66 of the file 
wrapper of the patent in suit (Exhibit K)." 

Although the Hormuth evaporator uses a ball joint in 
which both members are made of Teflon, whereas tlie pat- 
ented device uses a ball joint in which one member is 
Teflon and the other is glass, the trial court found that a 
Teflon-glass ball joint "is the full equivalent of the Teflon- 
Teflon ball joint of the Hormuth evaporator insofar as 
its use in a rotary evaporator is concerned." (Finding 
of Fact 22, T. 54.) 

Thus, there are three different ways in which the Hor- 
muth rotary evaporator forms a part of the prior art. It 
has been imtented in 1957 (Exhibit R), it has been dis- 



15 



closed in publications printed in 1958 (Exhibit P) and 
1959 (Exhibit Q), aaid it has been in prior public use in 
this counti-y by Dr. Cava (Finding of Fact 20). 



THE GERMAN GEBRAUCHSMUSTER NO. 1,752,622 IS A PATENT 
OF A FOREIGN COUNTRY WITHIN THE MEANING AND 
INTENT OF 35 U.S.C. §§ 102(a) AND 102(b) AND IS PRIOR 
ART IN THIS ACTION TO BE CONSIDERED IN A DETER- 
MINATION OF OBVIOUSNESS UNDER 35 U.S.C. § 103. 

As plaintiffs correctly point out, there is no holding in 
this Circuit that a German Gebrauchsmuster is a patent 
within the meaning of § 102. Neither is there a holding to 
the contrary. The matter simply has not come up before 
this Court. 

However, this matter has been considered elsewhere. 

On November 2, 1965, Volmne 820, Nmnber 1, of the 
Official Gazette of the United States Patent Office (Ex- 
hibit Y) stated: 

"German Utility Model (Gebrauchsmuster) 

As Reference 

''The German law, in addition to the regular patent 
law, provides for short term exclusive rights in new 
articles of manufacture (processes and compositions 
of matter being excluded) which might be: of a lower 
order of inventive merit than is required for the 
longer term patent. These go by the name of 'Geb- 
rauchsmuster' w^hich word is customarily translated as 
'utility model' and might also be translated as 'useful 
article.' They are issued without search and the 
specifications and drawings, while available to the 



16 



public, arc not issued in printed form. Since copies 
are not placed in tlie Examiner's search files, (jues- 
tions relating to their use have been infreciuent. Re- 
cent events, however, have so increased the probgu 
bility of a German Gebrauehsnmster coming to the 
attention of the Examiner that a general statement 
as to their status and use appears desirable. 

• * * 

*' Inasmuch as the full specifications are not issued 
in printed form, they cannot be used as printed pub- 
lications, in conformity mth decisions of the courts 
and of the Patent Office that manuscript specifications 
of issued patents and of applications laid open for 
public inspection, are not printed publications. 

"Prior patents. — The Examiners may use the Geb- 
rauchsmuster, however, as a prior patent, effective as 
of the date of registration, in the same manner as 
they would use the patents of countries which do issue 
specifications in printed form; for example, as they 
may use a Spanish or South African patent which 
has been brought to their attention, or a Belgian pat- 
ent for the period of several years after it is granted 
and before the specification is issued in printed fomi. 

• * # 

''Section 901.05(b) is amended by adding the fol- 
lowing after the second paragraph on page 139: 
"German Utility Models (Gebrauchsmuster) may 
be used as references as prior patents, but not as 
prior printed publications, effective as of their reg- 
istration date. AVhen necessaiy, the Librarian will 
obtain the complete text of the si>ecification from 
the German Patent Office. A file of such copies is 
maintained in the Scientific Library. 

"Richard A. Wahl, 
Assistant Coumiissioner." 



17 



German Gebrauchsmusters have also come under ju- 
dicial scrutiny in American Infra-Red Radiant Co. v. Lam- 
bert Industries, Inc., 8 Cir. 1966, 360 F.2d 977 at 991 
through 994. The court discussed in great detail the 
nature and effect of a German Gebrauchsmuster and con- 
cluded that: 

"* * * It is an important part of the German patent 
system. It has all of the attributes normally attributed 
to a patent which include an application setting forth 
claims, protection granted by the Government for a 
limited time, a right of action in the inventor to pro- 
tect the invention against infringement, notice to the 
public in an official publication, and availability to the 
public of the specifications and claims. Furthermore, 
the Gebrauchsmuster falls within the general defi- 
nition of 'patent' in that it does conunand a sovereign 
grant of right of exclusive use for limited i>eriods." 

The Court then held that a German Gebrauchsnmster 
is a foreign patent within the purpose of 35 U.S.C. § 102 
(d). Since there is no difference between "^<^ 102 (a), 
102(b) and 102(d) in language, each referring to an 
invention "patented * * * in * * * a foreign country", 
the reasoning of Infra-Red applies ecjually to each section. 
We submit that this Court should so hold and rule that a 
German Gebrauchsmuster is a foreign patent within the 
meaning of ^§ 102(a) and 102(b). 

Such a ruling would thus establish the German Geb- 
brauchsmuster No. 1,752,622 as prior art. Since the date 
of this patent is in 1957, prior to any date of plaintiffs' 
invention, it would obviously be prior art under § 103. 



18 



THE CLAIM OF THE PATENT IN SUIT IS PLAINLY OBVIOUS 
IN LIGHT OF THE PRIOR ART. 

As set forth above, the difference between the claimed 
subject matter of the patent in suit and the 1950 Craig 
device (Exhibit D) is that Craig uses a glass shaft with a 
greased glass-to-glass ball joint, whereas the patent in 
suit uses a Teflon shaft with a self -lubricating Teflon-to- 
glass ball joint. 

In 1954 (the filing date), Buchler used a Teflon-glass 
ball joint in a rotarj^ evaporator to obtain a self -lubri- 
cating airtight seal. 

In 1955 (the filing date), Birchall knew that grease 
in an all-glass stopcock could result in contamination and 
that this could be eliminated by replacing the glass plug 
with a Teflon plug. This concept and expedient was well 
known by Dr. Rapoport and others by 1957. 

In 1957, the Hormuth evaporator used an all-Teflon ball 
joint in a rotary evaporator, at the same point as such 
ball joint is located in the patent in suit, to give an air- 
tight joint without lubrication. This was also pointed out 
in 1958 in the Houben-Weyl publication (Exhibit P). A 
Teflon-Teflon ball joint is the full equivalent of a Teflon- 
glass ball joint insofar as their use in rotaiy evaporators 
is concerned. 

Thus, plaintiffs did not invent the basic combination. 
Craig did. They did not discover that grease in a glass- 
to-glass joint could cause contamination and that this 
could be avoided by making a Teflon-to-glass joint. Birch- 
all did. They did not invent a self-lubricating Teflon-glass 
ball joint. Buchler did. They were not even the first to 
use a self-lubricating ball joint using a Teflon member at 



19 



the upper end of the shaft. The Hormuth evaporator was 

the first. 

Neither were plaintiffs th(> first to invent a oorrosion- 

and-contaniination-free rotary evaporator. 

"The Hormuth evaporator, illustrated and de- 
scribed in Exhibits P, Q and R, and used at Ohio 
State University, is an evaporator in which there are 
no metal parts in contact with the fluids therein and 
is accordingly corrosion-free, and also is a rotary 
evaporator in which no contaminating grease or other 
lubricant was used. Such evaporator fulfills the func- 
tions that were stated by plaintiffs to be new in their 
rotary evaporator at pages 44, 45 and 66 of the file 
wrapper of the patent in suit (Exhibit K)." 
(Finding of Fact 21, T. 54.) 

What, then was left for plaintiffs to invent? In their 
opening brief they suggest that their invention is un- 
obvious because their Teflon shaft extends down and 
makes a tapered Teflon-to-glass connection with the glass 
flask. However, if this is their invention they do not even 
claim it. The claim states only that the shaft has "one 
end removably securing a flask in airtight engagement for 
rotation therewith." This does not specifically define a 
tapered Teflon-to-giass joint. 

Even if the claim had defined such a specific structure, 
Birchall shows a tapered Teflon-to-glass joint in a stop- 
cock. The Hormuth evaporator shows a tapered Teflon - 
to- glass joint between the Teflon ball joint member h 
and glass shaft g. 

As is plain, the patented device is a comi>letely obvious 
assemblage of well-known parts to obtain well-known re- 
sults. Nothing unexpected or unusual has been achieved. 



20 



**The conibination of elements set forth in the claim 
of the patent in suit does not accomplish any result 
that is unusual, unobvious, surprising or unexpected. 
Instead, the results of such combination of elements 
are those which arise by virtue of the inherent prop- 
erties of glass and Teflon and glass-Teflon combina- 
tions, which properties were well kno\\Ti at the time 
of the invention of the patent in suit." 

(Finding of Fact 27, T. 55.) 

In light of these disclosures of the prior art the trial 
court found (Findings of Fact 24, 25 and 26, T. 55) : 

'*24. In view of the prior art in this case, and 
particularly the Hormuth evaporator and the Birchall 
patent, it would have been obvious to one of ordinary 
skill in the laboratory apparatus art at the time of 
the invention of the patent in suit to use self-lubri- 
cating Teflon-glass members in order to achieve an 
airtight joint and to avoid contamination which would 
result from the use of grease or other lubricants that 
might be required in a corresponding glass-to-glass 
joint. 

"25. In view of the teachings of the prior art, and 
in particular of the Hormuth evaporator and the 
Birchall patent, it would have been obvious to one of 
ordinary skill in the laboratoiy apparatus art at the 
tune of the invention of tlie patent in suit to substi- 
tute a Teflon shaft for the glass shaft of Craig (Ex- 
hibit D) so that such shaft would make a tapered 
Teflon-to-glass connection with the flask (as in Birch- 
all) and would have a ball joint connection to the 
stationary glass tubing (as in Hormuth), in order to 
provide for a non-corrosive evaporator ha\nng self- 
lubricating connections. 

"26. In view of the teachings of the prior art. and 
particularly in \aeAv of Craig, Hormutli and Birchall, 



21 



it would have been obvious to one of ordinary skill 
in the laboratory apparatus art at the time of the 
invention of the patent in suit to make a non-corrosive 
and lubrication-free rotary evaporator as set forth 
in the claim of the patent in suit." 

These findings are manifestly correct and the determi- 
nation that the patent is invalid as obvious should be here 
sustained. 



THE PRIOR PUBLIC USE OF THE HORMUTH ROTARY EVAPO- 
RATOR BY DR. CAVA INVALIDATES THE PATENT UNDER 
35 U.S.C. §102(b). 

As was found by the court below, in Finding of Fact 
20 (T. 53) : 

"In the summer of 1959, Dr. Michael P. Cava, then 
a Professor of chemistry at Ohio State University, 
Colmnbus, Ohio, was at the University of Zurich in 
Zurich, Switzerland. While there, he saw in Dr. K. 
Bernauer's laboratory a rotary evaporator as de- 
scribed in Finding No. 19, and arranged for the pur- 
chase of one of such evaporators from the L. Hor- 
muth Company. Such evaporator was received by Dr. 
Cava at Ohio State University no later than January 
of 1960. Such evaporator was as shoAvn and described 
in the German Gebrauchsmuster No. 1,752,622 (Ex- 
hibit R) tmd the L. Hormuth brochure (Exhibit Q). 
This Hormuth evaporator was put to public use at 
Ohio State University more than one year prior to 
the August 11, 1961 filing date of the patent here in 
suit. The Hormuth evaporator was used extensively 
for a period of several years. Dr. Cava recognized 
that the use of grease or other lubricant could result 
in product contamination and for that reason no such 



22 



containinatinfj: <?rease or other lubricant Avas ever 
used on the Teflon ball joint connection or the glass 
shaft-to-flask connection of the Hormuth evaporator." 

Such prior ]niblic use is a bar to a patent issued on an 
application filed more than one year later, under 35 U.S.C. 
'^ 102(b), whether the patent be to the same exact thing 
or to obvious improvements thereon which add nothing 
of a patentable nature. 

Cataphote Corporation i\ De Soto Chemical Coat- 

mgs, Inc., 356 F.2d 24, 27 (9th Cir. 1966) ; 
Tool Research and Engineering Corp. v. Honcor 
Corp., 367 F.2d 449 (9th Cir., 1966). 
"* * * Likewise where an article is sold, there is a 
sale or public use of the article itself and of all im- 
provements on the thing which would be obAdous to 
one skilled in the art. * * *" 

It is quite plain that the physical differences between 
the patented and Hormuth rotarv^ evaporators are indeed 
trivial and minor and add nothing which was patentable. 
The ungreased self-lubricating Teflon-glass ball joint of 
the patent is the full equivalent of the Hormuth ungreased 
self-lubricating Teflon-Tefllon ball joint of Hormuth. The 
Teflon member h of Hormuth makes a tapered connection 
with glass shaft g which in turn is connected in airtight 
and imgreased engagement with the glass flask, whereas 
in the patent the Teflon shaft makes an ungreased tapered 
connection -with the glass flasks. 

Stated in a different way, the difference between the 
Hormuth and patented devices is that in the i)atented 
device the Teflon member h of Hormuth is made longer so 
that it connects directly with the flask. ^ 



23 



As is the patented device, the Hormuth evaporator is 
an. evaporator in which there are no metal parts in con- 
tact with the fluids therein and is accordingly corrosion- 
free. As with the patented device, the Hormuth evap- 
orator used no contaminating grease or other lubricant. 
The Hormuth evaporator fulfills all functions that were 
stated by plaintiffs to be new in their rotary evaporator 
during the prosecution of their patent. (Finding of Fact 
No. 21, T. 54.) 

The lengthening of the Teflon member h of Hornmth 
to connect directly to the flask, and the substitution of an 
equivalent Teflon-glass rotary ball joint for the Hormuth 
Teflon-Teflon rotary ball joint are obvious variations of 
the Hormuth device. 

Accordingly, the prior public use in this country of 
the Hormuth rotary evaporator invalidates the claim of 
the patent in suit. 



THE MOST PERTINENT PRIOR ART WAS NOT 
CONSIDERED BY THE PATENT OFFICE. 

The statutory presmnption of validity of the patent in 
suit is clearly overcome in this case. 

In plaintiffs' opening brief, at page 7, it is stated that 
"nearly all of the art relied upon herein was present and 
considered" by the Patent Office and that ''tlie only 
alleged reference which was not considered b}^ the Patent 
Office and which is here relied upon both in the trial 
court's decision and by Defendants, is the so-called 
Bernauer Gebrauchsmuster. ' ' 

These statements are completely incorrect. 



24 



Tlio Craig publication (Exliibit D) is relied upon in 
Findings of Fact 17, 25 and 26. 

The Bircliall Teflon-glass laboratorv' stopcock (Exhibits 
A-6, S and T) is relied upon in Findings of Fact 18, 24, 
25 and 26. 

The Houben-Weyl publication (Exhibit P) and Hor- 
muth brochure (Exhibit Q) are relied upon in Finding 
of Fact 19. 

The prior public use ol' tlie Horniuth rotary evaporator 
is relied ui)on in Finding of Fact 20. 

The pertinence of these i)i-i(u' art i>atents, publications 

and uses have already been discussed. The trial court 

was clearly correct in Finding of Fact 28 (T. 5G) that: 

"The Craig publication (Exhibit D), the Honnuth 

rotary evai)orator (Exhibits P, Q and R, and the use 

thereof at Ohio State University) and the Bircliall 

patent No. 2,876,985 (also advertisements thereof, 

Exhibits S and T) were not considered by the Patent 

Office during the prosecution of the patent in suit, 

and are much more pertinent than the prior art 

which was considered bv the Patent Office." 



PLAINTIFFS' PATENTED DEVICE WAS IN PRIOR PUBLIC USE 
AT THE UNIVERSITY OF CALIFORNIA. 

The court held that jilaintiffs' rotary evapoi-ator Iiad 
been in public use at the University of California more 
than one year prior to the August 11, 1961 filing date 
of the application for the patent in suit. (Findings of 
Fact 29, 30, 31 and 32, T. 56.) 

Plaintiffs challenge this holding on the basis of this 
Court's decision in Cataphotc Corporation v. De Soto 



25 



Chemical Coatings Inc., 356 F.2d 24 (9th Cir., 1966), Tool 
Research v. Honcor, 367 F.2d 449 (9th Cir., 1966), and 
Super Mold v. Clapps Equipment, 397 F.2d 932, 158 USPQ 
527 (9th Cir., 1968), wherein patents were held invalid 
under 35 U.S.C. 102(b). Plaintiffs state at page 23 of 
their opening brief : 

"* * * In each instance there was substantial proof 
of prior public cotnmercializatlon to support the find- 
ings. Here there is none * * *" 



'■e^ 



By inference plaintiffs seem to suggest- that there can 
be no prior public use unless such use was coniniercial. 
If this is their position, it is just as incorrect as their 
understanding of the applicability of the prior art. 

The leading case on this point is Egbert v. Lippmann, 
104 U.S. 333, 26 L. Ed. 755 (1881), wherein the inventor 
of a corset spring made a gift of the device to a friend 
who used it for several years before the inventor applied 
for his patent. This was held to be a public use and inval- 
idated the patent. 

''We remark, secondh', that, whether the use of an 
invention is public or private, does not necessarily 
depend upon the number of persons to whom its use 
is known. If an inventor, having made his device, 
gives or sells it to another, to be used by the donee 
or vendee, without limitation or restriction, or injunc- 
tion of secrecy, and is so used, such use is public, 
■within the meaning of the statute, even though the 
use and knowledge of the use may be confined to one 
person. ' ' 

Tool Research and Engineering Corp. v. Honcor 
Corp., 367 F.2d 449 (9th Cir., 1966.) 
a* * * Qj^g gg^^p ^Y gift of an article is sufficient to 
constitute a sale or public use. 



* # * J? 



26 



In Randolph r. AUia-Chalmers Mfg. Co., 264 F.2d 533 
(7th Oil-., 1959), a mechanic for Pure Oil Conii>an3' made 
and installed resilient seats on tractors 0A\Tied by Pure 
Oil, which tractors were then used by Pure Oil without 
limitation or restriction and with the approval and full 
loiowledge of the mechanic. ]\Iore tlian two years later 
(the statutory period then), the mechanic lih'd an appli- 
cation for patent on the resilient seats. It was held that 
there was a prior public use by Pure Oil of the invention 
and the patent was invalidated. 

Plaintiffs also attack the holding below of prior public 
use on the basis that the use of the invention at the Uni- 
versity of California was merely experimental Mnthin the 
meaning of Elizabeth v. Pavement Co., 97 U.S. 1 2G : 24 
L.Ed. 1007 (1877). 

A review of the evidence in the present case shows 
clearly that plaintiffs' rotary evaporator was in prior 
public use and that such use was not exioerimental. 

Plaintiffs' rotary evaporator with its Teflon shaft was 
first conceived by them sometime in early 1958. 

Pursuant to a recjuest by Dr. Hamlow, a rotary evap- 
orator using a Teflon shaft was built at the University 
of California in Berkeley in April, 1958 (E. 31), but this 
particular device was not successful. (R. 32.) 

In May, 1958, another device was built at the Univer- 
sity of California (R. i^o) which embodied all of the ele- 
ments of the claim of the patent in suit. (R. 39.) This 
device was tested and the results were "very satisfactory 
and very exciting." (R. 35.) 



27 



Dr. Hainlow put it to use in his research work (R. 94), 
wliich he was perfoniiing towards his thesis (R. 96), and 
it satisfactorily performed tlie functions required by his 
research. (R. 40.) 

Another model of tlie same design was built a year 
later in April, 1959, because plaintiffs wanted to see if it 
would perform as well as the previous one. It did (R. 
40-41), and Dr. Hamlow continued to use both in his re- 
search. The earlier device has Ijeen in continuous use, 
and was still in use at the time of the trial (R. 91). 

The door to Dr. HamloAv's laboratory was kept locked, 
but graduate students had keys and access to the labora- 
tory. (R. 93.) 

In the two years from May, 1958, these rotary evap- 
orators proved very satisfactory for Dr. HamloAv's work. 
(R. 96.) 

Some time prior to March, 1960, Dr. Hainlow described 
the rotary evaporator to Dr. Rapoport's seminar group 
of 12 graduate students (R. 94) and there was an interest 
and anxiety on their part to acquire these instrmnents for 
their use (R. 94). There was no injimction to secrecy 
given to these students about the rotary evaporator. 

Following the seminar. Dr. Rapoport decided to have 
more of these devices made and given to more distant 
graduate students to give the devices the worst experi- 
mental tests in their laboratory work that could be con- 
ceived. (R. 42-43.) 

Forty-nine more rotary evaporators were made and 
completed by March 9, 1960. (R. 98.) Dr. Rapoport told 
the graduate group that the evaporators were now avail- 



28 



able for distribution and that anybody who wanted one 
could come aoid get one to use in their work. (R. 99.) The 
students were to re])ort to Dr. Rapoport at the end of 
the niontli as to their of)e ration. (R. 43.) The students 
began to use these evaporators in April, 1960. (R. 99.) 

By the end of the month Dr. Rapoport spoke specifi- 
cally to these students, and none of them reported that 
they were unsatisfactory. (R. 99.) 

After the end of the tests, Dr. Rapoport concluded that 
<<« » * ^j^jj. ^y^^ j^^ ^g }jr^(j jjj Q^j. iiands the best rotary 

evaporator that was around. With such an impressive in- 
strmiient, the decision was that we should go ahead and 
make it available to others doing chemical research as 
well." (R. 44.) 

Practically all of the evaporators given out to these stu- 
dents have been in continuous use up to the time of trial. 
(R. 91-92.) 

Drs. Hamlow and Rapoport set up Chem((uip Company 
to sell these rotary evaporators, with the first sale being 
made to Stanford University in November, 1960. (R. 
46-47.) 

The present commercial model of jilaintiffs is essen- 
tially the same as the forty-nine devices given to the stu- 
dents, except that it is a "slicker model", "painted and 
parts have been covered so that they are not exposed. 
The working principle and the working parts are essen- 
tially the sajne." (R. 44.) 

The api)lication was filed on August 11, 1961, over 15 
months after the forty-nine rotary evaporators were dis- 
tributed to the students for their use. 



29 



Under these facts it is plain that the use of the forty- 
nine rotary evaporators by tlie graduate students at the 
University of California was a "prior public use" under 
the meaning of 35 U.S.C. § 102(b). 

Plaintiffs, hoAvever, contend that the use of these de- 
vices by the graduate students was merely "experunen- 
tal" until some time after the critical date August 11, 
1960 (one year before the application was filed). At this 
point we should bring out tliat the rotary evaporators 
were used by the graduate students in their reg-ular ex- 
periments, just as plaintitfs' conmiercial devices are used 
in laboratory experiments. The "experimental" use al- 
io w^ed under § 102(b) means such use as is made with an 
end towards perfecting the invention oi- towards an ascer- 
taimnent of whether the invention has been perfected. 
Once these have been established, further use is not 
' * experimental. ' ' 

Talking the evidence as favorably to plaintiffs as pos- 
sible, any "experimental" use of the invention ended one 
month after the forty-nine rotary evaporators were dis- 
tributed to the students, and ])ut into use in April 1960, 
for it was by tliis time that they all reported to Dr. Rap- 
oport that the evaporators were satisfactory. The con- 
tinued use of the evaporators by the students was clearly 
public use thereof. 

Looking at the evidence more realistically, Dr. Hamlow 
had been using the rotary evaporators in his own re- 
seai'ch for about two years from May 1958 and they 
proved very satisfactory for his work. (R. 96.) After this 
long usage, 49 of the devices were made and distributed 
to the students to use in their work. It is hard to believe 



30 

that plaintiffs would coininit the University to the expen- 
diture necessary to make 49 rotary evaporators if plain- 
tiffs were not satisfied that these devices would work as 
well as they liad up to that time. 

It should also be borne in mind that these devices are 
not complicated. They have a rotating Teflon shaft, a 
glass flask at one end and a flxed glass member at the 
other. Some time may be required to see if such a device 
will work, but it is difficult to see that more than the two 
years' use by Dr. Hamlow was required for this purpose. 
Particularly is this so in view of the fact that the original 
1958 design was never changed and was still in use at 
the time of trial. 

The record fully supports the finding that the 49 rotary 
evaporators were in public use before August 11, 1960. 



THERE IS NO INFRINGEMENT IN THE PRESENT CASE. 

Throughout their opening brief (at pages 10, 14, 32 and 
33), plaintiffs charge Dr. Dreiding's firm with producing 
its "Vapsilator" as a "Chinese copy" of the structure 
and coanbination of elements of the claim in suit. There 
is no basis for this accusation of copying. In plaintiffs' 
opening statement it was stated (R. 8) : 

"Now, the defendants in making the Va])silator one 
has to admit that they are a ])erson skilled in this 
art. Instead of copying and following the teachings 
of the prior art, they followed the teachings and 
copied plaintiffs' device. I think that we can readily 
show that they were not following the prior art but 
following what we taught." 



31 



Towards tlie end of the trial, the Court remarked 
(R. 340) : 

"There is no cloud on the record because of the 
opening statement because there is no e\n.dence of 
copying at least to this point of trial." 

No evidence of copying was later introduced by plain- 
tiffs. Instead, plaintiffs put into evidence an agreement 
dated September 4, 1966 wherein defendants were to be 
the distributors in this comitry of the accused Vapsilator 
(Exliibit 16.) This agreement was in existence before the 
patent in suit ever issued. The existence of the accused 
Vapsilator prior to the issuance of the jjatent certainly 
refutes plaintitTs' charges of copying. 

On the question of infringement, the Court foimd as 
follows (Fiadings of Fact 33, 34 and 35, T. 57) : 

"33. The accused 'Vapsilator' device is advertised 
for use u^tli a recommendation that a thin fihn of 
silicone lubricant be used at the Teflon-glass ball 
joint. Such reconmiendation is made to help elimi- 
nate the production of Teflon shavings that are pro- 
duced in a rotary Teflon-glass ball joint which Tef- 
lon shavings can result in contamination of the prod- 
ucts in or passing through the device. 

"34. There was no evidence of any use of the 
accused 'Vapsilator' device in the United States 
without the use of the reconnnended thin film of sili- 
cone lubricant. 

"35. The accused 'Vapsilator' when used with the 
reconmiended thin film of silicone lubricant has a ball 
joint which is not self-lubricating and is thus substan- 
tially different in manner of operation and result 
achieved as compared to the apparatus claimed by the 
claim of the patent in suit." 



32 

These are findings ivi" fact, and thus the "clearly erro- 
neous" rule applies, F.R.CP, 52(a). 

The evidence is undisputed tliat the accused "Vapsi- 
lator" device is advertised for use with a reconinienda- 
tion that a thin film of silicone lubricant be used at the 
Teflon-glass ball joint. (Exhibit 2.) There is no evidence 
that it was ever used in the United States without the 
use of the recommended thin film of silicone lubricant. 

Dr. Rapoport testified that if a thin layer of silicone 
lubricant is used at the ball joint of the accused device 
there would be contamination of the product passing 
through the device (R. 114), and if it could only be so 
used it would not be in accordance with plaintiffs' inven- 
tion (R. 115). If the accused device is used with lubricant. 
Dr. Rapoport didn't know whetlier it would come A\ithin 
the scope of the invention. (R. 116.) 

The findings of fact ar(^ not clearly erix)neous and fuUy 
support the judgment of non-infringement. 

Additionally, even though tlie court below declined to 
pass upon the point, there is another ground for non- 
infringement in this ease. 

The claim requires tliat there be "a soui'ce of low pres- 
sure" to whicli the exliausl means is connected. In otliei- 
words, "a source of low i)ressure" is an clement in tlie 
claim. 

Although the accused device is intended to be used with 
a source of low pressure, there is no testimony or evi- 
dence that the accused device was sold b\- phiintiffs or 
anyone else Avith a source of low pressure, or that the 
accused device was ever used with a source of low ])res- 



33 



sure. As a consequence, there is no proof whatsoever that 
the claim has been directly infringed. Nelson v. Batson, 
322 F.2d 132 (9th Cir., 1963.) 

35 U.S.C. 271(c) provides that a seller of a device con- 
stituting a material part of the invention, knoAving the 
same to be especially made for use in an infringement of 
the patent, shaU be liable as a contributory infringer. 
Even if it be assumed that the provisions of 35 U.S.C. 
271(c) apply here, it is well established that "there can 
be no contributory infringement in the absence of a direct 
infringement." Aro Mfg. Co. v. Convertible Top Replace- 
ment Co., 365 r.S. 336, 341 (1961). 

Since no direct infringement has been proven in the 
present case, defendants' sales of the accused device can- 
not be acts of contributory infringement. Plaintiffs will 
probably contend that this is quibbling on defendants' 
part, but the burden of proof was on plaintiffs to prove 
infringement. This they have not done. 

The same is true with respect to "inducement" of in- 
fringement under 35 U.S.C. 271(b). There can be no 
liability for inducing infringement unless there has been 
an infringement. Aluminnm Extrusion Company v. Soiile 
Steel Compamj, 260 F.Supp. 221, 224 (D.C. CD. CaUf., 
1966.) 



34 



CONCLUSION 

The jud^nent below is well founded both in fact and 
in law and should be affirmed in all regards. 

Dated, San Francisco, California, 
December 3, 1968. 

Respectfully submitted, 

Bernard Kriegel, 

MeLLIN, HaNSCOM & HURSH, 

Oscar A. Mellin, 
Carlisle M. Moore, 
By Carlisle M. Moore, 
Attorneys for 
Defendants-Appellees. 



No. 22,810 

In the '""^'3 2' l9£g 

United States Court of Appeals 



For the Ninth Circuit 



Harlan P. Hamlow and Henry Rapoport, 

Plaintiffs- Appellants, 
vs. 

Scientific Glass Apparatus Corp., a Cor- 
poration, and RiNCo Instrument Com- 
pany, Inc., a Corporation. 

Defendants- Appellees. 



Plaintiffs-Appellants Reply Brief 



Henry Gifford Hardy 

1811 Mills Tower 



C( I I Y^ T San Francisco, California 94104 



415/362-3361 



Attorney for Plaintiffs- 
DEC 1 3 1968 Appellants 



SORG PRINTING COMPANY OF CALIFORNIA, 346 FIRST STREET, SAN FRANCISCO 94105 



TABLE OF CONTENTS 

Page 

Plaintiflfs-Appellants Reply Brief 1 

The Findings of Fact 2 

Infringement Has Been Proved 3 

Invalidity Has Not Been Established 4 

The Craig Apparatus Fails to Anticipate or Make Plaintiffs Inven- 
tion Obvious 4 

Birchall Stopcocks Teach Nothing of Value Concerning Rotary 

Evaporators 5 

The Deposition of Dr. Cava Is Useless to Destroy Plaintiffs Patent.. 7 

Defendants Have Not Sustained Their Burden of Proof of Prior 

Public Use 9 

Conclusion 11 



TABLE OF AUTHORITIES 

Page 

Egbert v. Lippmann, 104 US 333; 26 L Ed 755 (1881) 9 

Elizabeth v. Pavement Co., 97 US 126; 24 L Ed 1000 (1877) 10 

Tool Engineering v. Honcor, 367 F2d 449; 151 USPQ 236 (9th 
Cir-1966) 9 



No. 22,810 
In the 

United States Court of Appeals 

For the Ninth Circuit 



Harlan P. Hamlow and Henry Rapoport, 

Plainti§s-Appellants, 
vs. 

Scientific Glass Apparatus Corp., a Cor- 
poration, and RiNCO Instrument Com- 
pany, Inc., a Corporation. 

Defendants- Appellees. 



Plaintiffs-Appellants Reply Brief 



Plaintiffs have received and studied the Brief filed by Defend- 
ants-Appellees. Three impressions are inescapably derived from a 
reading of the Brief: 

1. The extent of the quotations from printed exhibits; 

2. The extensive quotations from, and reliance upon the so- 
called Findings of Fact which have been fabricated by 
Defendants according to their own desires ; and 

3. Castigation of Plaintiffs counsel for the lack of knowledge 
of the law. 

Only those matters directed to the issues in this case will be 
responded to. 



2 
THE FINDINGS OF FACT 

The so-called Findings of Fact are literally the fabrication of 
Defendants attorneys. The actual and complete extent of the con- 
sideration given to this case by the trial court is set forth in the 
decision (R 509-511) which is set out in full in Appendix B of 
Plaintiifs Opening Brief. The shallowness and the limitations of 
this decision are plainly apparent. The trial court made it abund- 
antly clear that nothing other than that which was stated was con- 
sidered. Accordingly, everything else in the so-called Findings of 
Fact is solely the manufacture of Defendants attorneys in the effort 
to mold the decision to their own uses and purposes. Plaintiffs, of 
course, objected to these Findings (T 39) but without avail, and 
the Findings were signed without even so much consideration as 
a hearing. It is, therefore, submitted that this is not the kind of 
Findings contemplated by Rule 52 F.R.P.C. as they are not the 
Judge's Findings even by adoption. They are certainly not the kind 
of Findings which warrant consideration by this Court, or which 
can be relied upon in determining the rights of the parties on this 
appeal. A great portion of Defendants Brief is devoted to quota- 
tions from their own Findings and in relying so heavily upon 
them. Defendants are merely echoing their own biased views. 

Possibly, Defendants considered that since Plaintiffs lost the 
case, everything should be "sock it to them". The Findings do 
reflect this attitude, but such a situation is not warranted here. 
Judgment was for Plaintiffs under 35 U.S.C. § 101 and 116 (R 
447). It was not even true in the decision referred to in Appendix 
B. For example, the only basis for holding non-infringement was 
"the apparent required use of lubricant" (R 510; See Opening 
Brief pp 10, 11 and 15). In this connection, the trial court did not 
hold that a source of low pressure or vacuum was not in the 
Vapsilator, as Defendants claim (Reply Brief p 32). What Avas 
actually held is plainly stated (R 510-511). 



3 

"Mr. Moore: Your Honor, about the point of low vac- 
uum source. That was another contention that we stated, 
avoided infringement because the claim calls for and there 
is no proof. 

The Court: I think that it is fairly implicit in the adver- 
tising that the court could draw an inference that there is a 
low vacuum source. 

Mr. Moore : There is no question that the device if used 
is to be so used but there is now proof that it has been so 
used. That is my point. 

The Court: I do not think I am ready to so find in that 
respect." 

The so-called Findings of Fact go far beyond, and are there- 
fore Defendants extrapolations of the terse limits of the decision. 
Beyond those limits, the Findings are merely self-serving state- 
ments. Plaintiffs assert there is no substantial testimony to support 
these Findings. 

INFRINGEMENT HAS BEEN PROVED 

Under the heading of infringement. Defendants take Plaintiffs 
to task for stating that Dr. Dreiding's Swiss company in producing 
its "Vapsilator", produced a structure which is a Chinese copy of 
the combination of elements in Plaintiffs claim. They dally with 
this Court not only as a matter of semantics, but by taking a state- 
ment of counsel from the Opening Statement and treating it as 
evidence. In Plaintiffs Opening Brief, it was stated that the "Vap- 
silator" produced by Dr. Dreiding's Swiss Company is a Chinese 
copy of Plaintiffs claim (pp 2, 10, 32, 33). Plaintiffs have inter- 
preted this to this Court as a statement that Defendants deliber- 
ately copied Plaintiffs apparatus. This we do not know and never 
asserted, besides, it is a matter of morality. Plaintiffs are not con- 
cerned with morality at this point, but only the facts, and the facts 
are that the Defendants "Vapsilator" is a structure which does 



4 

not follow any of the prior art, but which does precisely and 
exactly copy the structure and function of the elements of the 
claim in suit. This is a controlling circumstance. (See Opening 
Brief pp 14-20). 

On page 31 of Defendants Brief, they point out that copying 
was impossible because the Agreement for distribution of "Vapsil- 
ators" in this country, dated September 21, 1965, (Plf Ex 16) 
was in existance prior to the issuance of Plaintiffs patent. This is 
nonsense. It is the unrefuted testimony that Plaintiffs equipment, 
following the disclosures of the patent in suit, were placed on 
sale November I960 (R 46), which is some five years prior to 
the Agreement to which Defendants refer. There was ample time 
in which Defendants could have obtained Plaintiffs rotary evapor- 
ator prior to the manufacture of the "Vapsilator". 

Infringement is so evident, particularly in view of the admis- 
sions of Defendants. (Opening Brief pp 15-16) that one wonders 
if Defendants can really be serious in pressing the point of non- 
infringement. There is no evidence to support any Finding directed 
to non-infringement. 

INVALIDITY HAS NOT BEEN ESTABLISHED 

The Craig Apparatus Fails to Anticipate or Make Plaintiffs Inven- 
tion Obvious. 

In the Reply Brief, the Craig device (Def Ex D) is relied upon 
to a very large extent, but only as interpreted by the obviously 
biased testimony of its financially interested witness, Dr. Dreiding 
(Brief p 3) — supplemented by their own concocted Findings 
(Brief p 2). The sophistry of Dr. Dreiding's testimony is ex- 
emplified in his cross-examination (R 419-425). Perhaps a fair 
and unmistakable way to demonstrate the misleading character of 
Defendants argument, is to picture both the Craig device and the 
device of the claim in suit. (See structures reproduced along side) 

In the Craig apparatus, A is a flask with an elongated neck C 
which releases into the interior of the flask B at right angles to the 



4 

not follow any of the prior art, but which does precisely and 
exactly copy the structure and function of the elements of the 
claim in suit. This is a controlling circumstance. (See Opening 
Brief pp 14-20). 

On page 31 of Defendants Brief, they point out that copying 
was impossible because the Agreement for distribution of "Vapsil- 
ators" in this country, dated September 21, 1965, (Plf Ex 16) 
was in existance prior to the issuance of Plaintiffs patent. This is 
nonsense. It is the unrefuted testimony that Plaintiffs equipment, 
following the disclosures of the patent in suit, were placed on 
sale November I960 (R 46), which is some five years prior to 
the Agreement to which Defendants refer. There was ample time 
in which Defendants could have obtained Plaintiffs rotary evapor- 
ator prior to the manufacture of the "Vapsilator". 

Infringement is so evident, particularly in view of the admis- 
sions of Defendants. (Opening Brief pp 15-16) that one wonders 
if Defendants can really be serious in pressing the point of non- 
infringement. There is no evidence to support any Finding directed 
to non-infringement. 

INVALIDITY HAS NOT BEEN ESTABLISHED 

The Craig Apparatus Fails to Anticipate or Make Plaintiffs Inven- 
tion Obvious. 

In the Reply Brief, the Craig device (Def Ex D) is relied upon 
to a very large extent, but only as interpreted by the obviously 
biased testimony of its financially interested witness. Dr. Dreiding 
(Brief p 3) — supplemented by their own concocted Findings 
(Brief p 2). The sophistry of Dr. Dreiding's testimony is ex- 
emplified in his cross-examination (R 419-425). Perhaps a fair 
and unmistakable way to demonstrate the misleading character of 
Defendants argument, is to picture both the Craig device and the 
device of the claim in suit. (See structures reproduced along side) 

In the Craig apparatus, A is a flask with an elongated neck C 
which releases into the interior of the flask B at right angles to the 



flow. The neck C is formed with and is an integral part of flask 
B. Tlie material to be evaporated is placed in A. The vapor flows 
through the neck C and releases into the flask B. The material in 
flask B is condensed by the cooling in pan I (R 417). The narrow 
neck of the flask B is coupled to a glass tube G by a short length 
of rubber hose D (R 418). Thus, A, C, B, D, and G are rotated 
as a unit (R 417) by the motor and wheel H. E is "a standard ball 
joint". This is admittedly a glass to glass ball and socket joint 
wliich "For operation, joint E is well greased with a heavy stop- 
cock lubricant and evacuation is begun." It is apparent from a 
comparison of the Buchler patent (R 419 Def Ex A- 5) that this 
patent is merely a refinement of the Craig apparatus. It operates 
in precisely the same way with two simultaneously rotating globes 
and functions the same way. In the Craig article, the operation of 
the figure is from left to right, while in the Buchler patent draw- 
ing the operation is from right to left as shown. 

So far as consideration of the Craig article by the Patent Office 
is concerned, the determination of presumptive validity does not 
depend upon whether the article was cited, for by Defendants own 
standards, the Buchler patent is more pertinent than the Craig 
apparatus, and the Patent Office did consider the Buchler patent 
and, upon appeal, allowed Plaintiffs claim thereover (Def Ex K) . 
The Craig apparatus could not function successfully because of 
the contamination of the rubber connection D and that of the 
lubricating grease on the joint at E (R 353, 407, 180). This was 
also true of Buchler (R 454). For a comparison of all of the art 
relied upon by Defendants compared element for element with 
the claim in suit, see Plaintiffs Appendix D at the end of the 
Opening Brief. 

Birehall Stopcocks Teaeh Nothing of Value Concerning Rotary 
Evaporators. 

Defendants disagree with Plaintifi^s statement that the Birehall 
patent (Def Ex A-6) , directed to stopcocks for laboratory glass- 




PLAINTIFFS APPARATUS 
PLAINTIFFS EXHIBITS 1 and 22 







^23 




lo Micuum 



CRAIG APPARATUS-DEFENDANTS EXHIBIT D 



v%^vxx-.- v ^^-;^NVv\\ss\\^S's^\^g^ 



'42a 




BUCHLER APPARATUS - DEFENDANTS EX A-5 



6 

ware, is non-analogous art. The fact that stopcocks are used in a 
laboratory does not teach the subject-matter of rotary evaporators, 
or any other piece of apparatus which may or could be used in a 
laboratory. Whether art is analogous or not is determined on tlie 
basis of structure. On the basis of the structure shown on the 
Birchall patent and the advertisements of Fischer & Porter Co. 
(Def Ex S and T), Plaintiffs submit that this is indeed non- 
analogous art. Whether it is or not, is really not of prime impor- 
tance because tlie Birchall patent is not a disclosure of or a teach- 
ing which would make the subject-matter of Plaintiffs rotary 
evaporator obvious to one having ordinary skill in this art. 
Defendants assertion is not the equivalent of proof, and they 
offered no proof to support this assertion. 

The glass seat of the stopcock is sloping or conical in shape. 
The Teflon plug is frusto conical in shape in order to conform 
with tlie angle of the seat. The very nature of Teflon, which pre- 
sents a slippery surface, would cause the plug to slip out of 
engagement. Of and by itself, it could not remain in its seat as 
was customary when glass plugs were used. The Patentee Birchall 
himself says that it is an object of his invention to continuously 
urge the plug into wedging engagement within the seat by a 
steady pull of a compression spring or other means applied to the 
end of the plug axially thereof. The whole teaching of the 
Birchall patent is a structure for maintaining the Teflon plug on 
its seat by means of compression devices externally thereof (R 
133) Therefore, the teaching of Birchall applied to Plaintiffs 
invention would be that if the tapered glass neck of a flask 34 
were to be coupled to the taper 32 of Plaintiffs Teflon shaft 31, 
then the flask could not be held tightly thereon without some 
external means for continuously urging the same into the wedged 
engagement. No such teaching was or can be used in the appa- 
ratus of Plaintiffs claim. One of the unexpected benefits which 



7 
were achieved by Plaintiffs invention was the fact that this engage- 
ment remained air tight without external means, and in spite of 
differences in the co-efficients of expansion and contraction be- 
tween the glass flask 60 and the Teflon shaft 31 (R 130). Since 
Birchall could teach nothing useful for rotary evaporators, it can 
hardly be considered the ""most pertinent art". 

The clincher is that when Dr. Dreiding was asked on cross- 
examination whether or not a serious study of the Birchall patent 
revealed anything like Plaintiffs rotary evaporator (Plf Ex 22), 
he said there was nothing in the Birchall patent "remotely re- 
sembling it" (R 432). This would seem to end any claim that 
Birchall taught anything which would make Plaintiffs invention 
obvious under 35 U.S.C. § 103- 

It is therefore clear that not only is the Birchall patent not a 
teaching under 35 U.S.C. § 103 which would defeat the patent- 
ability of Plaintiffs claim, but that it was not the most pertinent 
art, so that the failure of the Patent Office to mention it does not 
defeat the presumptive validity of Plaintiffs claim. 

The Deposition of Dr. Cava Is Useless to Destroy Plaintiff's Patent. 

Apparently, Defendants rely upon the deposition of Dr. Cava 
of "Wayne State University (Detroit, Michigan) to invalidate 
Plaintiffs patent. Any reliance upon the deposition of Dr. Cava 
is tantamount to the denial of the right of Plaintiffs to cross- 
examination. Time and again. Dr. Cava made statements from 
"memory" under the prodding of Defendants counsel. Defendants 
well know, that there should have been some supporting evidence 
to confirm facts and dates supposedly testified to by Dr. Cava. 
Time and again, Dr. Cava was asked upon cross-examination, to 
produce any supporting data of any kind. Each time he could not 
do so. He finally admitted that he had nothing whatever to sup- 
port what he had said (R 293, 294, 232, 234, 236, 24l, 248) and 
that he was not a mechanic (R 224) so his memory of equipment 



8 
was not good. He had no independent memory of the Bernauer 
apparatus (R 229). He did, however, have files (R 220). Defend- 
ants did not call anyone from either Ohio State University or 
Wayne State University who could have given supporting evi- 
dence that they saw the equipment or that Dr. Cava had brought 
it in or anything which could give credence to his memory. Noth- 
ing like this was done. No shipping documents, no photographs, 
no written records of any kind were offered in support of Dr. 
Cava's asserted dates. The Hormuth brochure on the Bernauer 
equipment (Def Ex Q) bears no date, and no proof was ever 
offered to make this a publication of probative value. 

Furthermore, Dr. Cava was obviously indebted to his friend 
and mentor Dr. Dreiding. He continually, in the deposition, pro- 
tested his lack of interest and bias loudly and, at times, vocifer- 
ously (R 232, 239, 247, 221, 289). "Methinks he doth protest 
too much". 

So far as Plaintiffs are advised, the trial court placed no credence 
whatever in Dr. Cava, or his deposition. Certainly nothing con- 
cerning him is referred to in the decision. Here is another example 
where Defendants prepared Findings on matters which were not 
included in the decision of the trial court. 

Most important of all is that Dr. Cava could not place the date 
of his use of the Bernauer equipment accurately in 1959 or I960 
(R 232). If the use was actually after August 11, I960, then it 
was too late to be useful to Defendants. Clearly this testimony 
does not conform with the standards required to defeat a valid 
U.S. patent. 

Not only is there no proof by Defendants that the Bernauer 
Gebrauchsmuster and equipment are the same as that called for 
in Plaintiffs claim, but the evidence is all to the contrary. 



9 
Defendants Have Not Sustained Their Burden of Proof of Prior 
Public Use. 

If Defendants rely to any extent on the deposition of Dr. Cava 
to show pubhc use of the invention through the Bernauer appa- 
ratus, then this attempted proof fails for two reasons: First, there 
is no showing that the Bernauer apparatus is the same in structure 
as called for by Plaintiffs claim; and Second, that this deposition 
is wholly unreliable and uncorroborated to any degree. 

This leaves only tlie use of Plaintiffs apparatus by the 12 grad- 
uate students of Dr. Rapoport at the University of California at 
Berkeley. This is a question of fact and the only facts are those 
which are found in the record, amounting to some eleven pages 
(See Opening Brief p 20) . Plaintiff submits that these facts, under 
the law, do not establish public use. 

Defendants rely upon Egbert v. Lippmann 104 US 333; 26 
L Ed 755 (1881). In this case the criteria used by the Court was 
whether the inventor had "given or sold" the product of the 
invention to a third person. There is no question that these 49 
machines were not sold. Equally, there can be no doubt that the 
apparatus was not given to the graduate students. These machines 
were at that time and always have been the property of the Uni- 
versity of California (R 99). The use was not without limitation: 
the apparatus was for use only in the private laboratory of each 
graduate student on the premises; under Dr. Rapoport's direction 
and control (R 43) ; each such student was required to givQ a full 
report of the operation of his apparatus to Dr. Rapoport (R 43) 
which was quite independent of the work on the graduate thesis 
(R97). 

There was no "sale or gift" of this apparatus as there was in 
Tool Engineering v. Honcor 367 F2d 449; 151 USPQ 236 (9th 
Cir. 1966). 



10 

Defendants rely upon the time when an apparatus was "per- 
fected" as tlie date when public use starts. This is not the crite- 
rion, and Defendants cite no authority in support of this phan- 
tasy* Dr. Rapoport was wise enough to realize that the reports 
of one of the inventors (R 42) was not sufficient testing in order 
to release the apparatus to the public, and that further testing was 
required (R 100) . Testing by his graduate students was decided 
upon because of the scope of projects amongst them and because 
it could be wholly controlled by him. There should be no penalty 
for being thorough and sure before a product is sold in commerce 
and indeed the law does not impose such a penalty. The whole 
purpose of experimental use in the law is to provide the inventor 
with a reasonable testing period. That is all that was done here, as 
demonstrated by the testimony of Dr. Rapoport. 



*Elizabeth v. Pavement Co. 97 U.S. 126; 24 L.Ed. 1000 (1877) makes 
it plain that no changes or improvements have to be made: (p. 135) 

"And though, during all that period, he may not find that any 
changes are necessary, yet he may be justly said to be using his 
machine only by way of experiment;" 



11 

CONCLUSION 

In spite of arguments pro and con, several facts stand above 
all else. 

(1) Infringement has been proved beyond doubt. 

(2) Defendants admit that no patent or publication cited 
by them teaches or discloses Plaintiffs invention. 

(3) Defendants have not sustained the burden of proof of 
prior public use. 

(4) Defendants only witness and expert has a very sub- 
stantial financial interest in the outcome of this litiga- 
tion. 

(5) Plaintiffs invention was not obvious even to Plaintiffs 
expert skilled in this art who is familiar with all of the 
art relied upon. 

(6) Defendants commercial machine is a Chinese copy of 
the structure of Plaintiffs claim and therefore does not 
follow the prior art on which Defendants now rely to 
defeat Plaintiffs claim. 

(7) Plaintiffs products made under the claim in suit have 
had great commercial success. 

If Plaintiffs claim, which is here in suit, is of sufficient import- 
ance for Defendants to identically follow, over everything else 
known in this art, it must be apparent that Plaintiffs have made a 
substantial contribution and that the decision and judgment of 
the trial court must be reversed. 

Respectfully submitted, 

Henry Gifford Hardy 

1811 Mills Tower 

San Francisco, California 94104 

415/362-3361 

Attorney for Plaint/ffs- 
Appellants 



No. 22,810 

In the 

United States Court of Appeals 

For the Ninth Circuit 



:■-3^^:;9E9 



Harlan P. Hamlow and Henry Rapoport, 

Plaintiffs-Appellants, 
vs. 

Scientific Glass Apparatus Corp., a Cor- 
poration, and RiNCo Instrument Com- 
pany, Inc., a Corporation. 

Defendants-Appellees. 



Plaintiffs-Appellants Brief 



Henry Gifford Hardy 

1811 Mills Tower 
I San Francisco, California 94104 
415/362-3361 



I 

MOV ^'^^^ ? Attorney for Plaintiff s^ 



.MM 6. lUCK. ^w^bWiC 



Appellants 



SORG PRINTING COMPANY OF CALIFORNIA, 346 FIRST STREET, SAN FRANCISCO 94105 



TABLE OF CONTENTS 

Page 
Plaintiffs-Appellants Brief 

Statement of Issues Presented for Review 1 

Infringement 1 

Validity 2 

Statement of Pleadings and Facts Disclosing Jurisdiction 3 

Statement of the Case 4 

Summary of Argument 11 

Argument 14 

Infringement Is Clear and Unequivocal 14 

Invalidity Has Not Been Established 20 

The Patent in Suit Is Not Invalid Because of a Use at the University 

of California 20 

Plaintiffs' Invention Was Not Obvious Under 35 USC §103 24 

The Art Relied Upon Does Not Teach or Disclose Plaintiffs' 

Invention as a Whole at the Time the Invention Was Made 24 

The Bernauer Gebrauchsmuster 27 

The Buchler U. S. Patent 28 

The Birchall U. S. Patent 30 

The Ueberwasser U. S. and French Patents 31 

Plaintiffs' Invention Was Not Obvious Even to Persoiis Skilled in 

This Art 32 

Defendants "Vapsilator" Is a Chinese Copy of the Structure and 

Combination of Elements of the Claim in Suit 32 

The Presumption of Validity of Plaintiffs' Patent Is Unrebutted 34 



ii Table of Contents 

Page 
Commercial Success by Plaintiff Is Not Questioned 37 

Plaintiffs' Invention Filled an Urgent Need 37 

Conclusion 39 



1 



Appendix A 

Plaintiffs-Appellants Exhibits 1 

Defendants-Appellees Exhibits 2 

Appendix B 

Opinion by Trial Court (R 509-5 1 1 ) 5 

Appendix C 

Drawings of the Patent in Suit and the Bernauer Gebrauchsmuster 7 

Appendix D ' 

Claim of the Patent in Suit; Prior Art Relied Upon by Defendants 8 



TABLE OF AUTHORITIES 

Cases Cited Pages 

American Infra-Red v. Lambert, 360 F(2) 977; 149 USPQ 722 
(8th Cir-1966) 36 

Ashlock V. Atlas-Pacific, 225 F Supp 205, 139 USPQ 421 
(1963) 17 

Cataphote Corp. v. De Soto Chem 356F(2) 24, 25; 148 USPQ 527 
(9th Cir-1966) 23 

Ekco V. Chicago Metallic, 321 F(2) 550; 138 USPQ 547 (7th Cir. 

1963) 19 

Elizabeth v. Pavement Co., 97 U.S. 126; 24 L.Ed 1000 

(1877) 22,23,24 

Esco V. Hensley, 147 USPQ 15, 20 (DC ND Calif- 1965) 19 

Evans Products v. Preco Inc., 378 F(2) 191; 153 USPQ 835 

(9th Cir.-1967) 26 

Graham v. John Deere, 379 U.S. 956; 148 USPQ 459 at 467 
(1966) 12,25 

Hayes Spray Gun v. E. C. Brown Co., 291 F.2d 319, 322; 129 
USPQ 383, 386 (9th Cir. 196I) 34 

Hensley Equip. Co. v. Esco, 375 F(2) 432; 152 USPQ 781 (9th 
Cir.-1967) 26 

National Sponge Cushion v. Rubber Corp., 286 F(2) 731; 128 
USPQ 320 (9th Cir.-196l) 34 

Neff Instrument v. Cohu, 298 F(2) 82; 132 USPQ 98 (9th Cir.- 
1961) 34 

Permutit Co. v. Graver Corp., 437 (2) 898; 7 USPQ 51 (7th Cir.- 
1930) 36 

Ex parte Smith, 82 USPQ 83 (P.O. Bd App-1941) 36 

Stearns v. Tinker & Rasor, 252 F(2) 589; 116 USPQ 222 (9th Cir.- 

1957) 18 

Super Mold v. Clapp's Equipment, F(2); 158 USPQ 527 (9th Cir.- 

1968) 23 



IV Table of Authorities 

Cases Cited Pages 

The Barbed Wire Patent Case, 143 US 275 (1892) 39 

Tool Research v. Honcar, 367 F(2) 449; 151 USPQ 236 (9th Cir.- 
1966) 23 

Wahl V. Carrier, 358 F(2) 1; 148 USPQ 698 (7th Cir.-1966) 17 

White V. Converse, 20 F(2) 311 (2ndCir.-1967) 25 

Zilk V. Deatons, 377 F(2) 153 USPQ 386 (9th Cir.-1967) 26 

Statutes 
U.S. Code: 

Title 28, Section 291 4 

Title 28, Section 1338 4 

Title 28, Section 2201 4 

Title 35, Section 101 11 

Title 35, Section 102 2, 11 

Title 35, Section 102(a) 3 

Title 35, Section 102(b) 2,3,11,21,22 

Title 35, Section 103 2, 3, 24 

Title 35, Section 271 17 

Title 35, Section 271(a) 2,19 

Title 35, Section 281 4 

Texts 

XVII Journal of the Patent Office Society 35 

Manual of Patent Examining Procedure (1961) 36 



No. 22,810 

In the 

United States Court of Appeals 

For the Ninth Circuit 



Harlan P. Ham low and Henry Rapoport, 

Pla'mtiQs-Appellants, 
vs. 

Scientific Glass Apparatus Corp., a Cor- 
poration, and RiNco Instrument Com- 
pany, Inc., a Corporation. 

Defendants-Appellees. 



Plaintiffs-Appellants Brief 



STATEMENT OF ISSUES PRESENTED FOR REVIEW 
Infringement 

1. The holding of non-infringement cannot be sustained be- 
cause infringement by Defendants* in the manufacture and sale of 
the "Vapsilator" Rotary Evaporator, has virtually been conceded, 
and has been thoroughly proved. 

2. Infringement is not avoided because of a recommended use 
of the equipment in a non-infringing manner where the equipment 



*PlaintifTs are Appellants here, but the parties will be designated in this 
Brief as they were in the trial court. 



2 

itself embodies and duplicates the precise structural elements of 
the claim in suit, and operates in the same way for the same pur- 
pose. Furthermore, infringement is not avoided because no actual 
use without lubricant was proved. Any ina)2ujacture or sale is 
infringement under 35 USC § 271(a). 

Validity 

3. The single claim of the patent in suit is not invalid and 
void under 35 USC § 102(b) because it was not in public use in 
this country more than one year prior to the date of the application 
for the patent in suit. The testing of 49 devices at the University 
of California was not a public use defeating validity of the patent 
in suit. Further, there is no anticipation of the claim of the patent 
in suit under 35 USC § 102. 

4. The single claim of the patent in suit is not invalid and void 
under 35 USC § 103 because the differences between the subject 
matter of said claim and the prior art are such that the subject 
matter as a whole would not have been obvious at the time of the 
invention to a person having ordinary skill in this art, as required 
under 35 USC § 103. The teachings of the German Gebrauchs- 
muster Registration, supplemented by those of the Birchall and 
Buchler patents, do not invalidate the claim of the patent in suit. 

5. The single claim of the patent in suit is for a combination 
of elements and this combination is not invalid because they do 
in fact produce unusual, surprising and unexpected results. In this 
connection, Plaintiffs may rely on features and advantages not set 
forth in the original filing. 

6. If a German Gebrauchsmuster Registration may be con- 
sidered prior art in the determination of obviousness under 35 
USC § 103, v/hich Plaintiffs do not concede, then this foreign Reg- 
istration is available only to the extent which is apparent on the 
face of the document and without explanation or extrapolation. 

7. On the basis of the record herein, the statutory presumption 



3 

of validity of the patent in suit and the single claim thereof has 
not been overcome. A German Gebrauchsmuster Registration was 
not a patent of a foreign country within the meaning and intent of 
35 use § 102(a) and 102(b) at the time the application for the 
patent in suit was pending, and therefore the presumptive validity 
is unaffected by this unpublished German Registration. 

8. The Bernauer evaporator said to have been in use at Ohio 
State University does not represent a public use in this country 
more than one year prior to the filing date of the application for 
the patent in suit as it is wholly unproved and vague as to struc- 
ture and time of use, and is wholly without confirmation or cor- 
roboration. For the same reasons it is not available as prior art 
under 35 USC § 103. Additionally and for the same reasons, the 
alleged modifications are not available to Defendants for any 
purpose. 

STATEMENT OF PLEADINGS AND 
FACTS DISCLOSING JURISDICTION 

This is a patent infringement suit brought by the Plaintiffs, 
Dr. Harlon P. Hamlow and Dr. Henry Rapoport (T 48),* 
against Scientific Glass Apparatus Corp., a California corporation, 
a seller of the alleged infringing equipment (T 48), Rinco 
Instrument Company, Inc., an Illinois corporation, the importer 
of the equipment (T 50), operating under the exclusive license 
from the manufacturer, Chemophor Zurich, a Swiss company 
(T 51), which voluntarily appeared and agreed to be bound by 
the results of this trial just as if it were an original party (R 68, 
T 51). Chemophor Zurich openly and actively assumed the en- 
tire control and management in the defense of this litigation 
(T 51). Dr. Andre Dreiding, a Swiss citizen and half owner of 
Chemophor Zurich (R 297, 376), was the only witness for 



*Throughout this Brief, T will be used to designate the Transcript of 
Record and R will be used to designate the Court Reporter's Transcript. 



4 

Defendants at the trial. The trial court held the patent in suit 
invalid and not infringed. This decision was given from the 
bench at the conclusion of the trial (R 509-510). The suit was 
brought under the patent laws of the United States, Title 35 
use § 281 and Title 28 USC §1338. Defendants counter claim 
is based upon Title 28 USC §§ 2201 and 1338(a) (T 48). This 
Court has appellate jurisdiction under Title 28 USC § 291. De- 
fendants filed a Cross appeal with respect to the taxing of costs 
but the same has been voluntarily dismissed by Defendants in 
this Court. There is no contention with respect to jurisdiction 
(PlfExl2,p6). 

STATEMENT OF THE CASE 

The patent in suit, No. 3,219,099 (T 6), is directed to a Rotary 
Evaporator which is a relatively small piece of scientific labora- 
tory equipment. The patent issued with a single claim on Novem- 
ber 23, 1965 to Plaintiffs, Dr. Harlon P. Hamlow and Dr. Henry 
Rapoport (T 48). Rotary evaporators are of recent origin and 
were first suggested in 1950 in an article by Craig et al (R 348). 
Defendants witness Dr. Cava stated they were not common even 
in 1959 (R 230). This was corroborated by Dr. Rapoport (R 24). 
Rotary evaporators have now become a necessary piece of appar- 
atus in practically all phases of chemical analysis. Defendants ex- 
pert. Dr. Dreiding readily stated (R 321) : 

"According to our standards I would say very frequent use. 
This is the kind of equipment one uses a great deal in a 
laboratory which, of course, is the reason why there has 
been so much development activity in this field * * *" 

The rotary evaporator uses thin layer evaporation to separate 
the desired residue from aqueous and other solutions (R 82-83). 
The thin layer is accomplished by the rotation of a spherical 
glass flask which spreads the solution over a large area on the 
inside of the flask even when small volumes are used. It is 



5 

apparent that this provides a condition for rapid evaporation. 
The equipment is operated under vacuum so that the tempera- 
tures used for evaporation are kept to a minimum. It is axiomatic 
that even the slightest contamination in the operation of the 
equipment which could contact either the solution or the vapors, 
would distort and destroy the accuracy of the work (R 25, 215, 
180, 284, 320, 448). The work of the prior investigators as 
exemplified by the plethora of patents and publications produced 
by Defendants herein, (Appendix A), talented and distinguished 
as they were, had not produced a rotary evaporator with an air 
tight rotating joint without the use of a lubricant. No one denies 
that lubricants and corrosion are contaminants (R 25, 180, 215, 
280,284, 320,448). 

For the proper operation of a rotary evaporator there are two 
joints or connections of primary importance (R 399, 449, 455). 
These are (l) the rotating joint or cormection between the ro- 
tating parts and the stationary take off parts i.e. the ball and 
socket joint and (2) the joint or connection where the evaporating 
flask is attached and detached to the rotating member. As long 
as these joints or connections are vacuum tight and non-con- 
taminating, they will function properly (R 35). It is apparent 
that the rotating connection is continually moving during opera- 
tion. The flask must be attached and removed at the beginning 
and finish of each operation (R 137). It is these two joints or 
couplings which are of primary importance in this litigation. 

In 1957 Drs. Hamlow and Rapoport were confronted with 
a great need for a rotary evaporator which was air tight and free 
of contamination (R 24-25). To their knowledge, no such equip- 
ment was available (R 25). They analyzed the problem (R 23) 
and concluded that such a rotary evaporator had to have gen- 
eral and universal usefulness (R 20-21) which incorporated (a) 
the handling of thin films of material in either batch or con- 
tinuous operation, (b) accomplished the evaporation at all use- 



6 

ful ranges of temperatures, (c) required no lubricated joints or 
couplings causing contamination, (d) would not react with the 
material being treated, also causing contamination, (e) could be 
readily assembled and disassembled, (f) had a minimum of parts 
and (g) was not a single purpose piece of equipment but which 
could readily be coupled for use with other standard laboratory 
equipment. This is what Drs. Hamlow and Rapoport set out to 
accomplish and this was what resulted in the patent in suit (R 
25, 55). Plaintiffs rotary evaporator as claimed is just such a piece 
of equipment (R 35). 

The apparatus of the patent in suit and its operation can best 
be explained and epitomized by reference to the patent drawing 
reproduced in Appendix C at the end of this Brief. It is per- 
haps not an over simplification to state that the apparatus is 
made up of three principal parts. First, beginning at the bottom 
of the drawing, is the spherical glass flask 60. This flask has a 
standard tapered glass neck 34 (R 18). Second, a Teflon rotat- 
ing shaft 31 with a male taper 32 at the lower end which couples 
within the neck 34 of the flask 60 making a glass to Teflon 
coupling (R 21). Since the Teflon shaft is rotated by the motor 
l4, it is apparent that the glass flask rotates with the shaft 31 
(R 20). And third, a stationary glass take off member 36 
which terminates at its lower end in a semi-spherical glass socket 
37 which mates with the rotating semi-spherical ball portion 33 
of the Teflon shaft 31 to form a Teflon-to-glass rotating coupling 
(R 21-22). The Teflon shaft 31 is a new element in this art 
(R 84, 85, 54). Teflon as a material is unique. It is substantially 
self-lubricating so that no lubricants are required. It can be 
machined to close tolerances like metal, and yet it is chemically 
inert. It has this last characteristic in common with glass. The 
Teflon-to-glass coupling of the flask 60 is air tight without 
lubricant (R 21) and separates easily without the hazard of 
freezing together (R 53-54). The coupling beb^'een the stationary 



7 

glass socket 37 and the rotating Teflon ball portion 38 of the shaft 
is air tight without a lubricant (R 21) . The vacuum or low pres- 
sure source is shown at 65 and supplies the vacuum for the opera- 
tion of the equipment. The Teflon shaft with the Teflon to glass 
contacts at both ends is new to this art (R 89, 84, 85, Plf Ex 4). 
It is readily admitted by Defendants that there is nothing in the 
prior art either by patent or publication which teaches a rotating 
Teflon shaft with Teflon to glass couplings at both ends, air 
tight with no lubricant needed (R 407, 353, 410). 

The patent in suit was not issued without a struggle. All of the 
claims were rejected in the Patent Office and an appeal to the 
Board of Appeals was taken by Plaintiffs with the result that 
because of the novelty and the absence of any teaching of a 
rotating Teflon shaft with Teflon to glass air tight lubricant free 
couplings at both ends, the single claim in suit was allowed (Plf 
Ex 4). 

In the Patent Ofiice (Def Ex K) and before the Board of 
Appeals (Plf Ex 4) nearly all of the art relied upon herein by 
Defendants was present and considered. The two principal patents 
relied upon by the Patent Examiner were Buchler (Def Ex A-5) 
and Ueberwasser (Def Ex A-7, A-8, R 56) were considered and 
the claim allowed over these patents (T 9) . 

The only alleged reference which was not considered by the 
Patent OflSce and which is here relied upon both in the trial court's 
decision and by Defendants, is the so-called Bernauer Gebrauchs- 
muster (Def Ex R, R-1) which is a German Registration of a 
Utility Model. It is Plaintiff^s position that the Gebrauchsmuster 
is not a patent within the meaning of the statute, and certainly 
is not a prior publication, and as such cannot defeat patentability 
of the claim in suit. Also, that the failure of the Patent Office to 
cite this German Registration does not destroy the prima facie 
validity of the patent in suit, because at the time PlaintiflFs patent 
application was before the Patent Office, a Gebrauchsmuster was 



8 

not considered a prior reference, or a prior patent (Def Ex Y) . 
According to Defendants own exhibit (Def Ex Y), the Patent 
Office did not change its practice with respect to Gebrauchsmuster 
Registration until 1965, which was after the allowance of Plain- 
tiffs patent. 

It is the testimony here that Dr. Bernauer in Zurich, Switzer- 
land had been investigating rotary evaporators and trying to im- 
prove them and was joined by Dr. Dreiding, Defendants expert 
and only witness, to complete the structure of the Bernauer Ger- 
man Gebrauchsmuster (R 299) . On numerous occasions during his 
testimony, Dr. Dreiding stated that he and Dr. Bernauer developed 
the equipment shown in the Gebrauchsmuster (Def Ex R, R-l) 
(R 300, 309, 319, 396, etc.). At no time in any of the published 
documents in evidence is there any reference to Dr. Dreiding in 
connection with this development, which goes to the veracity of 
this witness. It is Plaintiffs conviction that even if the Bernauer 
Gebrauchsmuster is considered for any purpose, it is not struc- 
turally within the claim of the patent in suit and therefore cannot 
in any event anticipate, or teach the combination of the claim here 
in suit. 

Defendants offered the deposition of Dr. Cava of Wayne Uni- 
versity (R 163) in the effort to establish the presence of a Ber- 
nauer rotary evaporator in the United States just prior to the 
critical date of Plaintiffs invention. Dr. Cava's obvious indebted- 
ness to Dr. Drieding (R 165, 220-226, 325-326, 377) and his 
loyalty to him, remove any credibility to his testimony. Dr. Cava 
had no independent memory of this equipment (R 236, 229.) 
Also, Dr. Cava was unable to substantiate even the slightest detail 
of the dates which he asserted with any documents which could 
in any way give credence to his deposition (R 293, 229, 231, 232, 
234, 236). However, his testimony is almost entirely with respect 
to Bernauer rotary evaporator, which, as stated above does not 
teach, disclose, or describe tlie inventive combination of the claim 
in suit. 



9 

In spite of all of the large number of alleged prior art references 
placed before the trial court, not any of it taught the combination 
of the claim in suit as will be demonstrated. (See Appendix D) 
Dr. Dreiding had the key portion of the combination of the claim 
directly before him in his investigations on this very subject, and 
yet neither he nor Dr. Bernauer recognized it (Infra p. 32). What 
is now said to be obvious by Defendants, was not obvious to their 
own experts at the time this invention was made by Plaintiffs. 

The trial court held that the combination was obvious under 35 
use § 103 and this is factually and legally unsupportable. 

Defendants urged, and the trial court held, that the patent in 
suit was invalid under 35 USC § 102(b) on the ground of prior 
public use (R 509). The testimony shows the use of approxi- 
mately 49 rotary evaporators made in accordance with the elements 
of the claim in suit (R 49), for a period of about five months 
prior to the critical date, which equipment was distributed by Dr. 
Rapoport (R 43) for use by his graduate students in their investi- 
gations looking toward a doctors degree in chemistry, for the sole 
purpose of testing the durability and operation of the equipment 
(R 100) under the severest kinds of circumstances (R 42-43). 
Prior to this time, the only testing of the equipment had been by 
Dr. Hamlow (R 41, 42, 100). Plaintiffs assert that this is not the 
kind of use which invalidates a meritorious patent, and that the 
evidence does not support the findings or conclusions that there 
was a prior public use which would warrant a holding of in- 
validity. 

As has been stated earlier, the claim of the patent in suit is 
for a combination of some eleven elements. Of these eleven ele- 
ments all but four were conceded by the Defendants to be incor- 
porated in the alleged infringing structure, the "Vapsilator." (R 
65) At the trial after Plaintiffs had proved the precise identity of 
the structure of the "Vapsilator" with that of the elements of the 
claim in suit, Defendants then conceded that all but one of the 
elements were incorporated into the "Vapsilator" (R 73, 127, 



10 

128) and with respect to this the structure of the element was not 
denied, but only the operating condition denied (R 75). They 
denied that the juncture between the Teflon shaft and tlie fixed 
glass socket at the upper end of the equipment was self-lubricating 
(R 75-76) because the brochure recommended the use of a lubri- 
cant. Such a recommendation is merely a semantic maneuver (R 
115). Where all of tlie elements of the combination claimed are 
present in tlie infringing structure, merely a recommendation for 
an inferior or improper operation does not avoid infringement. 
Defendants accordingly have tacitly admitted infringement. 

It is to be remembered that Defendants only witness, Dr. 
Dreiding from Switzerland (R 296), testified with respect to the 
alleged prior art offered by Defendants. He claimed personal 
knowledge and participation in the development of rotary evapo- 
rators since 1955, and led the trial court to believe that this prior 
art taught the subject matter of the claim in suit. However, when 
his own company (R 297, 376) came to build the infringing 
structure, the "Vapsilator" in Switzerland in 1965, ten years later 
and four years after Plaintiffs had had their machine on the market 
(R A6^, Dr. Dreiding's machine did not follow the teachings of 
the prior art, but rather incorporated every single detail of struc- 
ture and operation of Plaintiffs equipment. 

The questions which the trial court refused to face up to were: 
if the combination of elements claimed by the patent in suit was 
so obvious, why did not someone other than the Plaintiffs do it? 
Admittedly no one else did (R 407-410). Also, if the prior art 
devices worked completely satisfactorily to teach and disclose 
the structure and combination of Plaintiffs claim, then why did 
Dr. Dreiding's firm produce its "Vapsilator" as a "Chinese Copy" 
of Plaintiffs' claim, rather than following the prior art with which 
he was thoroughly familiar. 

The answers to these two questions alone demonstrate that the 
holdings of invalidity and non-infringement by tlie trial court 
must be reversed. 



11 

SUMMARY OF ARGUMENT 

The claim of the patent in suit is a combination claim of old 
and new elements. The invention, of course, resides in this unique 
organization as a whole, which is more than the sum of the parts. 

Infringement by Defendants product, the Vapsilator, was virtu- 
ally admitted, partly during the pretrial and the remainder during 
the trial. It was abundantly proved that it uses the complete com- 
bination of elements of the claim in the same organization and 
operates in precisely the same way for the same purposes. The 
holding of non-infringement cannot be sustained. The infringe- 
ment is not avoided by a "recommendation" for a less efficient 
use of the equipment, as the normal use would be precisely that 
of the patent in suit. It is the manufacture and sale of the equip- 
ment which is the infringement under 35 USC § 271(a). 

The question of validity is a sophisticated matter and requires 
study of the art and the application of the rules. The invention 
here is an important one, although the differences over the prior 
art do not appear to be giant strides. As so often happens, great 
changes come about in almost imperceptible increments and be- 
come apparent only when the new combination satisfies the needs 
of those involved. The defense of invalidity was based upon 35 
USC §§ 101, 102, 103 and 116. Judgment was given to Plaintiffs 
in connection with § 101 and § 116. (R 447). 

The defense, under §102 centered around 2 issues: first, a 
German Gebrauchsmuster covering a development of Dr. Ber- 
nauer, a Swiss investigator, and registered to L. Hormuth, the 
manufacturer of the Bernauer equipment. There is no holding 
in this Circuit that a German Gebrauchsmuster Utility Model 
Registration is a patent within the meaning of § 102. In no event 
is it a printed publication under § 102. Accordingly, the Gebrauchs- 
muster is not a proper reference in this case. Furthermore, at the 
trial Defendants readily admitted that the Gebrauchsmuster did 
not contain the elements called for in the claim of the patent in 



12 

suit and did not operate in the same way to accomplish the same 
results. Accordingly, there can be no anticipation by this Utility 
Model Registration. Therefore, there can be no anticipation under 
§ 102 because the devices must be identical in structure and oper- 
ation. 

Second, under § 102(b) tlie trial court stated there was a prior 
public use of plaintiffs' invention by graduate students operating 
some of these machines more than one year prior to the filing 
date. The evidence showed clearly that this was merely a testing 
use and factually well within the legal and permissible uses and 
of the decisions and did not constitute a prior public use. This 
holding of prior public use is not supported by the facts or the 
law. 

The main defense of invalidity appears to rest on the ground 
of obviousness under 35 USC § 103. One has to remember that 
anything becomes obvious after it has been done, and that in apply- 
ing the rules and tests, obviousness is to be determined as of the 
date of the invention, which was April 1958. The manner of 
determining obviousness was set forth by the Supreme Court in 
Graham v. John Deere, 379 US 956; 148 USPQ 459 at 467 ( 1966) . 
The Ninth Circuit has been successful in carefully following the 
rules laid down for determining obviousness. 

The prior art referred to in the testimony here shows that glass- 
to-glass joints between the flask and the shaft were common and 
well known. Glass-to-glass rotary ball joints were also well known. 
Teflon-to-Teflon rotary ball joints were also known. Only in Plain- 
tiffs patent is there taught glass-to-Teflon tapered joint in rotary 
evaporators and only in Plaintiffs patent is it taught that the 
Teflon-to-glass ball joint, which is self lubricating and contamina- 
tion free. Plaintiffs patent taught the all Teflon rotating shaft 
with a uniform continuous central passage. It is these new fea- 
tures combined with the old ones which made Plaintiffs rotary 
evaporator the success which it instantly became. Defendants 
cited a plethora of prior art in the attempt to invalidate Plaintiffs 



13 
patent on the ground of obviousness. (See Appendices A and D). 
The Court relied upon only three, the German Bernauer Utility 
Model Registration, the Birchall patent for stopcocks, and the 
Buchler patent. During the course of the testimony, Defendants 
expert. Dr. Dreiding, was asked to point out the patent and/or 
publication closest to the invention of the claim in suit. The Ber- 
nauer Utility Model Registration was the one selected. Defendant 
admitted that no prior patent or prior publication showed the com- 
bination of Plaintiffs claim. The Bernauer Utility Model did not, 
as was readily admitted by Defendants, contain the novel fea- 
tures of Plaintiffs combination. It did not teach anything which 
would make applicants novel combination obvious. In fact, it 
taught quite the contrary. The Bernauer Utility Model Registra- 
tion specifically states that a Teflon-to-Teflon rotary ball joint is 
essential to make it operate. There is nothing in it which would 
teach an all-Teflon rotating shaft. Thus, the main item of prior 
art does not contain, or teach, or disclose the possibility of Plain- 
tiffs combination. The trial court's perfunctory statement that 
the Buchler patent shows a contamination-free Teflon-to-glass 
joint is simply not true. It does show a Teflon-to-glass plus metal 
joint at one part in the apparatus, but neither Defendants nor 
anyone else claims that this was contamination free. This was 
one of the principal references in the Patent Ofiice and Plaintiffs 
claim was allowed over it. The Birchall patent related to stopcocks 
of glass with Teflon plugs. It is obvious that a stopcock cannot 
in any manner teach the combination of a rotary evaporator. Since 
a requirement is that the prior art must as of the date of inven- 
tion, show the combination of Plaintiffs claim to be obvious, it is 
apparent that the prior art relied upon in no way supports this 
conclusion. Individual elements of the prior art cannot be selected 
to form a synthetic structure which never existed, in the effort 
to show invalidity. Furthermore, commercial success is an element 
for consideration. There is no question but that Plaintiffs products 



14 
manufactured under the patent in suit had a phenomenal commer- 
cial success without any sales program and without any salesmen. 
There is no evidence to the contrary. 

One of the greatest compliments an infringer can pay to the 
patent in suit is to design the infringing instrument as a Chinese 
copy of the claim in suit. This is precisely what tlie Defendants 
did. Dr. Dreiding, who was Defendants only witness, and expert, 
and who owned a substantial interest in the company manufac- 
turing the infringing Vapsilator device in Switzerland, designed 
the infringing Vapsilator to combine all of the elements of the 
claim in suit and did not in any respect follow the prior art which 
he relies upon so strongly to invalidate Plaintiffs patent. If the 
prior art was sufficient to invalidate the claim of the patent in 
suit, then it would be the equal or better than that of the combina- 
tion claimed. Obviously it was not. Furthermore, both Dr. Dreiding 
and Dr. Bernauer were men highly skilled in this art. They pro- 
duced the Bernauer structure. In so doing, they had before their 
very eyes the germ of Plaintififs invention and yet it was not 
obvious to these highly skilled men. If Plaintiffs' invention was 
so obvious from the prior art, then why did not Dr. Bernauer 
and Dr. Dreiding produce it? The simple fact remains that only 
Plaintiffs did. It is apparent that the differences between the 
organization of elements in the claim here in suit was not obvious 
from the prior art at the time of Plaintiffs invention in April of 
1958. The defense of invalidity cannot therefore be sustained, 
in fact, or in law, and the patent is clearly valid. 

ARGUMENT 
Infringement Is Clear and Unequivocal 

The trial court, at the conclusion of the trial, held from the 
bench (R 510) that there was no infringement of tlie combination 
of elements set forth in the single claim of the patent in suit, 
and gave as the reasons (R 510) 



15 

"the apparent required* use of the lubricant at the connec- 
tion in tlie ball and socket as recommended and because of 
the lack of evidence of the lack of necessity of such lubricant 
at those points." 

Not only is there no evidence to support the holding of non- 
infringement, but the reasons ascribed are wholly without factual 
or even plausible support. 

In Defendants admissions (Plf Ex 12 p 2-4) and in the Findings 

of Fact (T 49), it was held that the single claim of Plaintiffs' 

patent was a combination claim divided into eleven elements, the 

separate elements of which Plaintiffs have lettered (a) to (k) 

inclusive, as follows: (See also Appendix D) 

"Vapsilator" 
Structure 

Apparatus for separating and removing volatile substances 

from a composition, in combination admitted 

(a) a housing, admitted 

(b) a shaft made of polyfluorovinyl resin admitted 

(c) rotatably mounted in said housing and with both 
of its ends extending beyond the limits of said 

housing admitted 

(d) said shaft having a passage of substantially uniform 
diameter extending axially through the entire length 

thereof present 

(R 66,70, 123) 

(e) said shaft having one end thereof removably secur- 
ing a flask in airtight engagement for rotation 
therewith admitted 

(f) said shaft having its opposite end formed as the 

ball portion of a ball and socket joint admitted 

(g) a separately mounted glass fixed member admitted 

*The word which Defendants used was "recommended" (Plf Ex 2, 
R 114). There is no testimony to the effect that lubricant was required, 
but quite the contrary. 



16 



"Vapsilalor" 
Structure 



(h) having an axial passage (Jicrethrough of sub- 
stantially the same diameter present 

(R 71-73) 

(i) terminating with the socket portion of the ball and 

socket joint rotatably receiving and seating the said 

ball portion of said shaft in airtight self-lubricating 

engagement and with their respective passages in 

alignment present 

(R 74-77, 125) 

(j) exhaust means communicating with the passage in 
said fixed member connected to a source of low 

pressure, and present 

(R 77-80, 127) 

(k) drive means mounted in said housing for rotating 

said shaft admitted* 



*See Defendants Statement R 73 and Stipulation R 127-128. 

In answer to the Plaintiffs' Interrogatories directed to infringe- 
ment (Plf Ex 12, p 2) Defendants admitted, and as embodied 
in the Pre-Trial Order (T 24) also admitted, that their apparatus, 
known as a "Vapsilator" (Def Ex AA) was accurately shown and 
described in their catalog sheet (Plf Ex 2). It was admitted also 
that Defendants were engaged in the manufacture, sale and dis- 
tribution of the "Vapsilator." Defendants admitted that all of the 
eleven elements (a to k) of the claim were precisely identical 
with those of the "Vapsilator" except for four elements (R 65) 
e.g. (d) (R 66, 70, 123), (h) (R 71, 73), (i) (R 74-77, 125), 
and (j) (R 77-80, 127). (See also Plf Ex 12, p 2-4). At the trial, 
(R 66), and under pressure of cross examination. Defendants 
conceded (R 127-128) that each of these excepted elements of 
the claim were in fact present in exactly the same form and struc- 
ture in Defendants apparatus except element (i), and as to this 
structure, i.e., the Teflon-to-glass ball and socket joint, the struc- 
ture was not denied, but only that this structure was not self-luhri- 



17 

eating engagement (R 76) . Infringement was virtually conceded 
by Defendants. The testimony of Dr. Rapoport was clear and 
unequivocal, in spite of Defendants' denials, that each of the 
elements of the combination claim was exactly found in the 
"Vapsilator," (R 65-80). Each of the elements of the "Vapsila- 
tor," as in the claim of the patent in suit, performed their same 
functions in the same way to accomplish the same result, (R 61, 
81). There were not substitutes or equivalents. The "Vapsilator" 
having the same combination of elements set forth in the claim 
and operating in the same manner for the same purposes and 
having been sold in this jurisdiction, is infringement under 35 USC 
§ 271. There is no evidence to the contrary. 

In Wahl V. Carrier 358 F(2) 1; 148 USPQ 698 (7di Cir— 1966) 
the Court held: (p702) 

"Those findings establish that the Carrier feeder includes 
each and every element of those patent claims and uses the 
same principle of operation— a deliberate and controllable 
vibration of the auger during its rotation, in the combination 
of such claims — to produce the identical results in the same 
manner as disclosed by the patent in suit. The Carrier feeder 
is therefore an infringing device. Binks Manufacturing Co. 
V. Ransburg Electro-Coating Corp., 1 Cir., 281 F.2d 252, 
258, 126 USPQ 318, 324; Briggs v. M&] Diesel Locomotive 
Filter Corp., 7 Cir., 342 F.2d 573, 580, 144 USPQ 701, 707." 

In Ashlock V. Atlas— Pacific 225 F Supp 205, 139 USPQ 421 
(1963) the Court held: (p433). 

"The Defendant's pitting machines each amount to a 
combination and arrangement of mechanism which produces 
the same effect and in substantially the same way as the 
combination and arrangement of the mechanism of Claim 11, 
and defendant's pitting machines are infringements of Claim 
11." 

As to the reasons given for the holding of no infringement, the 
Court referred to the language shown on the double spread of 



18 

Plaintiffs' Exhibit 2, and enlarged in Plaintiffs' Exhibit 21. These 
words under Point 2 are, "We recommend a thin layer of silicon 
lubricant" (R 114). There was no question but that lubricants 
can be used in the Teflon-to-glass ball and socket joint (R 342), 
but tliat such lubricant would be a contaminate (R 114) and 
destroy the accuracy of any work being done (R 448, 441, 215, 
284) . The use of lubricant does not destroy the air-tight engage- 
ment. The words of Defendants brochure do not state tliat tlie 
operation of the "Vapsilator" should never be without the use 
of a lubricant, or anything to the effect that a lubricant is required 
to be used in the "Vapsilator." Certainly, no purchaser of this 
equipment interested in accurate results would ever follow this 
recommendation knowing full well that the Teflon-to-glass rotat- 
ing ball joint would result in an air-tight self-lubricant engagement 
witliout lubricant contamination (R 89, 284, 342, 215, 320). 

Furthermore, the recommendation is inconsistent with, and con- 
tradictory to other statements in the "Vapsilator" brochure (R 
115) . In paragraph 4, it states the operation is clean and that only 
the solvent is in contact widi glass and Teflon. This could not be 
true if a lubricant were used. The recommendation cannot be taken 
seriously in view of this statement (R 115). The recommendation 
of the leaflet is obviously a red herring intended as a subterfuge 
in semantics to avoid infringement. 

The fact still remains that the Teflon-to-glass rotating ball joint 
will give an air-tight seal without lubricant and without contami- 
nation, both in Plaintiffs' claim and in the infringing "Vapsilator," 
and anyone using or purchasing any of this equipment would know 
this immediately. The structure of the claim is complete and iden- 
tical in the "Vapsilator" (R 80-81, 73, 127-128) and tlie structure 
is not destroyed by a recommendation for its misuse or less 
advantageous use. 

In Steams v. Tinker & Rasor 252 F(2) 589; 116 USPQ 222 (9th 
Cir.-1957) this Court held: (p.226) 



19 

"The reading of the testimony convinces us that Stearns did 
not use a wheeless pusher, because one with rollers or wheels 
provided a better mode of operation. This does not mean 
that merely because another uses a less effective mode of 
operation he avoids the charge of infringement." 

See also: Ekco v. Chicago Metallic 321 F(2)550; 138 USPQ 547 
(7th Cir. 1963) and Esco v. Hensley 147 USPQ 15,20 (DC ND 
Calif.-1965) 

The elements of the "Vapsilator" are identical with those of 
the combination of the claim in suit and this is determinative of 
infringement. 

The uncontroverted evidence is the exact identity of the struc- 
tural elements of the claim in suit and the structure of the "Vap- 
silator" (Def Ex A) as well as the operational identity (R 65-80) . 

As to the second reason ascribed by the trial court (R 510), the 
double negatives used result in a positive statement, and tlie proof 
is clearly that a Teflon-to-glass rotating ball joint is air-tight and 
self-lubricating (R 89, 342, 215) and that such a joint is neces- 
sarily free of lubricant in a rotary evaporator, if the machine 
is to function properly as intended and the results are to be accu- 
rate. The evidence is repleat with statements that there is no 
necessity for, in fact it is harmful to have lubricant used in the 
Teflon-to-glass ball and socket joint (R 89, 215, 320, 342, 448). 
Defendants admit that infringement requires that all of tlie ele- 
ments of a combination claim be found in the device charged to 
infringe (R 129). Infringement is established when such a device 
is made, used or sold 35 USC § 271 (a) . It is true that there is no 
proof of use (R 116). However, Defendants admit (Plf Ex 12, 
p 7) they did make and sell this combination of elements as set 
forth in the claim of the patent in suit, and by the statements of 
their own brochure (Plf Ex 2) it can be operated with or without 
a lubricant for the Teflon-to-glass ball and socket joint (R 115). 
Infringement is not determined by a recommended faulty or im- 



20 

proper use. Infringement is the making and/or selling of the 
infringing structure, the "Vapsilator." 

The holding of no infringement is clearly unsupported by the 
evidence and therefore should be reversed. 

Invalidity Has Not Been Established 

THE PATENT IN SUIT IS NOT INVALID BECAUSE OF A USE AT THE UNIVER- 
SITY OF CALIFORNIA 

The trial court treated invalidity of the patent in suit with the 
same cavalier approach as was done with respect to infringement. 
The holding of invalidity should not be treated lightly as it totally 
involves the destruction of earnest effort, and the sacrifice of time 
and money as well as the hope of future reward. It is therefore 
completely astounding that the trial court, without more a-do 
announced (R 509), 

"The Court finds that the use at the University of California 
of the 49 devices was a prior public use within the meaning 
of 35 United States Code Section 102(b)." 

Such a finding should be the result of a careful analysis of the 
testimony to ascertain tlie precise facts and the application of the 
facts so found to the law. 

The entire testimony on tliis point does not occupy much space 
in this record. It involves the direct testimony of Dr. Rapoport (R 
42-45), and the cross-examination of Dr. Rapoport (R 92-100). It 
covers a time period beginning not earlier than March 9, I960 up 
to August 11, I960, [which is one year prior to tlie filing of Plain- 
tiffs application], or some five months time. 

There is no question that 49 rotary evaporators were made (R 
42) around March 9, I960, and that these rotary evaporators were 
precisely the same as those of the patent in suit in all material 
aspects (R 43). It is equally true that the two original machines 
were both being tested by Dr. Hamlow (R 40-41, 92) and 
that Dr. Hamlow's reports to Dr. Rapoport on observations of 



21 
the use were very favorable. Why then were these 49 machines 
built? Both of the patentees had some reservations as to the suc- 
cess of the apparatus because the operation was being carried out 
by one of the inventors (R 42, 100) . Primarily it was Dr. Ham- 
low's baby, with the result that the treatment could be most gentle. 
Before reaching any decision as to the general and wide applica- 
bility of this apparatus, both Drs. Rapoport and Hamlow felt that 
it was essential to test these machines experimentally on a wide 
range of projects (R 42, 100). The best and worst of such tests 
were to put the apparatus into the hands of graduate students at the 
University of California (R 43) and require them to make reports 
on the construction and operation of this equipment in connection 
with their several and varying projects (R 42-43). Dr. Rapoport 
felt that this would be an extreme test under laboratory practice 
(R43). 

The test was conducted in the Department of Chemistry at the 
University of California and was at all times under the direction 
and control of Dr. Rapoport (R. 43). The instruments were 
turned over to his graduate students and passed out to them with 
the obligation of the students to give a full report on its construc- 
tion and operation (R 43). At the conclusion of the tests, no date 
for which was established. Dr. Rapoport felt that the results were 
so impressive that he and Dr. Hamlow should go aliead and make 
this equipment available to others doing chemical research (R 44) . 
There was no thought of any commercial use until after the testing 
of these machines. The apparatus was tested under a wide range 
of conditions and under all of them it stood up quite well (R 45) . 
The first sale did not occur until November 16, I960 (R 46), 
well within the one year statutory period (Patent Office Rule 65, 
35 use § 102(b)). 

On cross-examination, it was brought out that Dr. Rapoport 
had issued instructions to keep the laboratory locked (R 93) and 
that graduate students, custodians, and faculty members were the 



22 
only ones that had access thereto. No others had access (R 93). 
There was very httle opportunity for access because Dr. Rapo- 
port's graduate students occupied a portion of the third floor in the 
old Chemistry Building, which was an obscure location to begin 
with, and not on any main corridor (R 93-94) . 

At the time the instruments were issued. Dr. Hamlow described 
the instrument and its use in a seminar (R 94) and that an anxiety 
to acquire these instruments by the graduate students ensued. The 
instruments were to be employed in the graduate student's elected 
line of investigation looking forward to a doctors degree in chem- 
istry (R 95). The seminar was a closed seminar (R 97) which 
only Dr. Rapoport's own graduate students attended and only 
some twelve persons were involved (R 97). 

Each of these pieces of equipment was involved in no other 
work and was solely for the purpose of securing further experi- 
mental tests of this apparatus (R 100). 

Elizabeth v. Pavement Co. 97 US 126; 24 L.Ed. 1000 (1877) 
is the classic case on public use and represents the extent which 
courts will go to hold validity, when there has been no release 
of the invention to persons generally and where there is no com- 
mercial use or exploitation. The court held: (p 134) 

"The use of an invention by the inventor himself, or of any 
other person under his direction, by way of experiment, and 
in order to bring the invention to perfection, has never been 
regarded as such a use." 

"When the subject of an invention is a machine, it may be 
tested and tried in a building, either with or without closed 
doors. In either case, such use is not a public use, witliin the 
meaning of the statute, so long as the inventor is engaged, in 
good faith, in testing its operation. He may see cause to alter 
it and improve it, or not. His experiments will reveal the 
fact whether any and what alterations may be necessary." 

This Court has recently reviewed the law under 35 USC 
§ 102(b) and is fully cognizant of and cited with approval the 



23 

law which has continuously been applied since Elizabeth v. Pave- 
ment Co. (97 US 126, 24 L Ed. 1000 (1877). In Super Mold v. 
Clapp's Equipment .... F(2) ....; 158 USPQ 527 (9tli Cir. 1968), 
tliis Court stated: (p. 527) 

"The statute thus permits the inventor to retain the secrecy 
of his discovery as long as he does not commercially exploit 
its use for more than one year prior to his patent ap- 
plication." 

In Cataphote Corp. v. De Soto Cbem. 356 F(2) 24, 25; 148 
USPQ 527 (9th Cir.-1966), in Tool Research v. Honcar 367 F(2) 
449; 151 USPQ 236 (9th Cir.-1966) and in Super Mold v. Clapps 
Equip (supra) this Court held the patent invalid under 35 USC 
§ 102(b). In each instance there was substantial proof of prior 
public commercialization to support the findings. Here there is 
none. That the use here was in good faith merely experimental is 
best shown by the testimony of Dr. Rapoport (R 42) . 

"Q. What was the purpose of making that number of 
rotary evaporators at this time ? 

A. We were very impressed with the initial operation of 
the first and second instrument but we also had some reser- 
vation because the operation was being carried out by one of 
the inventors. Essentially it was his baby and the treatment 
I think was quite gentle. 

"Before reaching a decision as to the general and wide 
applicability of such an apparatus we felt it should be tried 
by lesser, let us say, more distant graduate students who 
would give it possibly the worse experimental tests that 
one could conceive. We had these made deliberately to put 
this to the extreme tests, namely, to put it in the hands of 
students." 

And again, on cross-examination (R. 100) 

"Q. At the time you placed this order to have forty nine 
of these evaporators made and most parts for one hundred 
at that time did you still have doubts that this device would 
not be satisfactory in operation? 



24 
A. I had some doubts. I was beginning to form an opinion 
but I had some doubts because as you recall the testing in 
the application liad been done by Hamlow and it was his 
baby. One has to be a little careful in evaluating his optimis- 
tic reports so that my impression was that this was good. We 
still needed further experimental tests." 

No conclusion as to any commercial use of the instrument was 
made until after the conclusion of this experimental work (R 44) . 
Dr. Rapoport stated 

"A. The conclusion was that this was it. We had in 
our hands undoubtedly the best rotary evaporator that was 
around. With such an impressive instrument the decision 
was that we should go ahead and make it available to others 
doing chemical research as well." 

The facts derived from this testimony — and there is no other, 
are clearly within the authorized use as set forth in Elizabeth v. 
Pavement Co. (supra) where the Court states (p 135) 

"He may have it put up and used in the premises of another, 
and the use may inure to the benefit of the owner of the es- 
tablishment. Still, if used under the surveillance of the 
inventor, and for the purpose of enabling him to test the 
machine, and ascertain whether it will answer the purpose 
intended, and make such alterations and improvements as 
experience demonstrates to be necessary, it will still be a 
mere experimental use, and not a public use, within the 
meaning of the statute." 

There are no facts to support invalidity under 35 USC § 102(b). 

PLAINTIFFS' INVENTION WAS NOT OBVIOUS 
UNDER 35 USC § 103 

The Art Relied Upon Does Not Teach or Disclose Plaintiffs' Inven- 
tion as a Whole at the Time the Invention Was Made 

The defense of obviousness is bottomed on the language of 
35 USC § 103 which in part reads as follows: 



25 

"A patent may not be obtained though the invention is not 
identically disclosed or described as set forth in section 102 
of this title, if the differences bet^-een the subject matter 
sought to be patented and the prior art are such that the sub- 
ject matter as a whole M^ould have been obvious at the time 
the invention was made to a person having ordinary skill 
in the art to which said subject matter pertains. * *" 

The reliance upon the prior art to show obviousness under § 103 
has a necessary corollary i.e. that such art cannot be available 
for the defenses under § 102 since they are not identical disclo- 
sures of Plaintiffs' invention. Also one should not forget the basic 
consideration that all things become obvious once they have been 
accomplished. 

WJoite V. Converse 20 F(2) 311 (2nd Cir— 1927) Judge 
Learned Hand stated (p. 313) 

"* * it is the obvious when discovered and put to use that 
more often proves invention. * * * * ^w^q fact that the 
changes were so slight is quite irrelevant, so long as they 
were essential to the purpose, as they were." 

The art relied upon by the Defendants consisted of some twenty 
prior art references none of which Defendants admitted (R. 410, 
353, Plf Ex 13 p 5) show the structure or organization of ele- 
ments called for by the claim in suit. (See also Appendix D) . 
However the trial court relied upon only three references in hold- 
ing Plaintiffs patent invalid in view of § 103. These three are: 

The Bernauer German Gebrauchsmuster (Def Ex R, R-l); 

Buchler U.S. Patent (Def Ex A- 5) and Birchall U.S. Patent 

(Def Ex A-6) . 

Only tlie first two of these are directed to rotary evaporators, and 
the third is directed to stopcocks. 

In order to uniformly apply the provisions of § 103, the 
Supreme Court in Graham v. John Deere, 279 U.S. 56; 148 USPQ 
459 (1966) set forth the basic factual inquiries which should be 



26 

satisfied in order to determine invalidity or validity. The court 
stated: (p. 467) 

"Under § 103, the scope and content of the prior art are 
to be determined; differences between the prior art and the 
claims at issue are to be ascertained; and the level of ordinary 
skill in the pertinent art resolved. Against this background, 
the obviousness or the nonobviousness of tlie subject matter 
is determined. Such secondary considerations as commercial 
success, long felt but unsolved needs, failure of others, etc., 
might be utilized to give light to the circumstances surround- 
ing the origin of the subject matter sought to be patented. 
As indicia of obviousness or nonobviousness, these inquiries 
may have relevancy." 

This Court has consistently followed the determinations laid 
down by the Supreme Court, see Evans Products v. Preco Inc., 
378 F(2) 191; 153 USPQ 835 (9th Cir— 1967) and Hensley 
Equipment Co. v. Esco 375, F(2) 432; 152 USPQ 781, at 782 
(9tli Cir.— 1967), Zilk v. Deatons 377 F(2) 545; 153 USPQ 386 
(9th Cir— 1967). 

The first determination of course is, what is Plaintiffs' inven- 
tion. This invention is a combination of eleven elements organized 
and combined to produce new and unexpected results in a rotary 
evaporator. Some of the elements are new to this art admittedly 
and some are old. 

There can be no denying that the elements old in this art are 
taught by the prior art. The new elements of the combination 
are a Teflon rotating shaft (R 455, 28-29, 445) having a tapered 
male coupling at the lower end, and a Teflon ball portion of a 
ball and socket joint at its opposite end, with a uniform passage 
therethrough (R 448) . It is also new in this art to provide a glass 
to Teflon air tight and contamination free coupling at the lower 
end of this shaft, (R 449, 407) and it is likewise new in tliis art 
to provide a Teflon to glass ball and socket rotating joint which is 
air tight and contamination free (R 451, 353, 410, 445). These 



27 
are the principal dififerences over the prior art cited by the De- 
fendants and it is these differences which Plaintiffs state result 
in a superior contamination free Rotary Evaporator (R 35, 44). 
The factual questions for determination are, are these differ- 
ences over the prior art references so insignificant that Plaintiffs 
invention as a whole, would be obvious to a person having ordinary 
skill in this art at the time the invention was made, April 24, 
1958 (R 27). The burden of proof is on Defendants and this 
burden has not been met. 

The Bernauer Gebrauchsmuster 

The German Gebrauchsmuster of Dr. Bernauer (Def Ex R, 
R-1) teaches a rotary evaporator, but it shows and teaches a glass 
to glass joint of the flask k to the glass shaft g (R 386). This 
glass to glass joint continues the problems of freezing and break- 
age which have plagued investigators and researchers in the past 
(R 111), it therefore teaches nothing new. It provides a Teflon 
adaptor h which has the ball of a ball and socket joint and a con- 
nector socket for the ball joint j, also of Teflon. Thus it is a 
rotating ball and socket joint with both members h and j made 
of Teflon (R 341). There is no teaching of an air-tight self lubri- 
cating Teflon-to-glass rotating ball and socket joint as called for 
in Plaintiffs claim. Defendants experts do not agree as to the use 
of grease or lubricant on the Teflon to Teflon joint. Dr. Cava says 
none was ever used (R 179), Dr. Dreiding says it was necessary 
to use lubricant to make the Bernauer equipment operate properly 
(R 324) 

"No we originally did not use any lubrication at all. We 
thought that this was the reason why we constructed tlie 
apparatus, to have it lubrication free. As it turned out how- 
ever that was as Teflon rotates on Teflon under vacuum 
conditions there were some pressures put upon it there is a 
small amount of flaking that occurs. The teflon is flaked off 
in extremely fine tiny little flakes so that one can hardly 



28 

weigh them, they cannot be seen. In order to avoid that some 
of my co-workers prefer to put a little bit of grease even 
on the teflon to teflon joint. It turned out that the amount of 
grease tliat one needed to make this teflon joint work, turn 
freely without locking was very, very small." 

In this, the Bernauer evaporator did not come up to the expec- 
tations which Dr. Dreiding had earlier stated to be as follows: 
(R 320) 

"The idea was to get a rotating joint that would lubricate 
itself, would have a very low co-efficient of friction so that 
you could avoid the use of a lubricant." 

The Bernauer teaching is: (Def Ex R-l) 

"the ball joint connections of Teflon are essential parts of 
the apparatus. Only through the use of Teflon * * * was 
it possible to construct such an efficient and full proof rota- 
tional thinlayer evaporator." 

Thus the Bernauer Utility Model Registration teaches only a 
Teflon to Teflon rotating ball and socket joint, and emphasizes 
that only Teflon can be used. Accordingly, there is not and could 
not be teaching of the rotary ball and socket joint of Teflon to 
glass as called for by Plaintiffs claim. 

The Bernauer Gebrauchsmuster does not teach or disclose the 
combination of elements called for by the claim in suit or any 
teaching which would make Plaintiffs invention obvious even to 
a skilled person in this art. (See infra p. 32) 

The Buchler U.S. Patent 

The Buchler U.S. Patent No. 2,865,445 (Def Ex A-5) is said 
to each the elements of Plaintiffs claim. A reference to Appendix D 
at the end of this Brief will show that when the structure of the 
Buchler Patent is charted against each of the elements of the claim 
in suit, it does not teach or disclose the elements or combination 



29 
required. At the trial Buchler was relied upon to show a Teflon 
to glass rotating ball and socket joint as called for in elements 
(f ) and (i) of the claim in suit. The portion of the Buchler device 
relied upon is at the take off end, shown in an enlarged sectional 
view in Figure 2 of Defendants Ex A-5. It shows a Teflon socket 
30 which rotates as a part of the threaded metal portion which is 
not numbered on the drawing. The glass ball of the ball and 
socket joint, which is stationary, is 29. It should be observed that 
here is a showing of a glass to Teflon rotating ball and socket 
joint in reverse but it still does not fulfill the requirements of 
Plaintifl^s claim in that it does not provide an air tight self lubricat- 
ing, contamination free engagement as required. The metal portion 
of this joint contacts the materials being treated and therefore 
contaminates and destroys the accuracy of the results. There is 
no teaching in Buchler that he was aware of the problem of con- 
tamination (R 454) or that without the metal threaded coupling 
he could have produced a glass to Teflon rotating joint which was 
air tight and self lubricating. Furthermore both Dr. Hamlow and 
Dr. Rapoport knew of the Buchler device and had attempted to 
use the same in the laboratory of the University of California, and 
had to give it up because of its most unsatisfactory performance 
(R 25). There is no teaching and no proof that the Buchler device 
contained the same elements, in the same organization and pro- 
duced the same results as the claim in suit. The evidence is com- 
pletely to the contrary and in fact Buchler could not produce the 
same results regardless of the elements contained in the Buchler 
patent. It is not a teaching of Plaintifi^s invention and certainly 
not sufficient to invalidate the Patent. 

The Buchler patent was carefully considered by the Board of 
Appeals in the Patent Office (PIf Ex 4) and the Patent in suit was 
granted over this reference. It is no more a valid reference now 
than it was then. 



30 
The Birchall U.S. Patent 

The Birchall U.S. Patent No. 2,876,985 (Def Ex A-6) is directed 
to a stopcock for laboratory glassware with a Teflon plug. It there- 
fore does not relate to rotary evaporators and must therefore be 
considered non-analogous art. 

In the first place it should be noted that the Birchall patent did 
not issue until March 10, 1959, which was some ten months after 
Plaintiffs had made their invention. Therefore regardless of what 
it shows it cannot speak as of the date of Plaintiffs invention which 
was April 24, 1958. (R 27, Plf Ex 5, 5-1). Accordingly, it cannot 
be relied upon to invalidate the patent in suit under § 103. 

In addition it must be pointed out that at best the Birchall 
patent shows a Teflon stopcock plug 7 which is tapered to fit a 
female glass taper 6. The entire patent is founded upon the 
phenomena that the Teflon plug 7 will not be retained in the 
glass female taper 6 due to its slippery nature, unless retained by 
some spring or pressure means (R 133-134). In figures 1, 2, and 

4 of the patent, the means are a spring 15 and lockcap 16 which 
is threaded into the narrow projecting end 12 of the plug 7. In 
Figures 6, 7, and 8, it is a wire spring clip which passes around 
the glass tubing 5 and up over the top of the plug 7. In Figure 

5 there is a compression means bearing against the top surface of 
the plug to hold it in position while permitting rotation to open 
and closed positions in each instance. 

In Plaintiffs rotary evaporator it was not possible to use such a 
teaching as is found in Birchall and apply spring or bearing 
pressure to the taper fit of the glass flask to the male Teflon taper 
of the rotating shaft. What seemingly was a disadvantage, how- 
ever, was unexpectedly converted by Plaintiffs into a very distinct 
advantage. There is a very substantial difference in the coefficient 
of expansion between glass and Teflon (R 136-139). Teflon 
expands at a greater rate with heat. When the glass flask is 
attached to the Teflon shaft Plaintiffs unexpectedly discovered 



31 

the benefit from this phoenomena because as the glass was heated 
and the heat transferred to the Teflon shaft joint the glass main- 
tained its air tight, contamination free contact with the Teflon 
while the Teflon expanded linearly without disturbing this neces- 
sary contact. The joint therefore becomes self adjusting (R 88). 
It also meant that if there was any problem of sticking at this glass 
to Teflon joint at the end of the evaporation period, the Teflon 
would contract faster and therefore free the flask for easy and 
quick removal without any possible sticking or freezing, or danger 
of breakage either to the flask or to Teflon (R 83-89). Thus in no 
event does the Birchall patent teach or disclose anything which 
could be helpful or useful at the time of Plaintiffs invention. 

The Ueberwasser U.S. and French Patents 

Perhaps it would be well to also point out that at times defend- 
ant seemed to rely (R 366) upon the Ueberwasser U.S. Patent No. 
3,034,573 (Def Ex 7). This patent was issued May 15, 1962 but 
was based upon a French patent which issued September 14, 1959 
(Def Ex 8) or a year and a half after the date of Plaintifl^s inven- 
tion [April 24, 1958}. Therefore it cannot speak with respect to 
any teaching obvious at the time Plaintifi^s made their invention, 
as required under § 103. 

This patent was relied upon by the Patent Office in rejecting 
Plaintifi^s claim, but the Board of Appeals overruled the Patent 
Oflfice and allowed the claim in suit over the Ueberwasser refer- 
ence (Plf Ex 4). 

Plaintifl^s have made a chart of the principal prior art relied 
upon by Defendants, charted against the individual elements of 
the claim in suit. This chart is Appendix D at the end of this 
Brief. It establishes beyond any doubt that none of the art relied 
upon teaches or discloses the elements of the claim in suit, and 
most assuredly does not teach anything with the same organization 
of elements. 



32 
Plaintiffs' Invention Was Not Obvious Even to Persons Skilled in 
This Art 

Section 103 states that the invention must be obvious at the time 
of the invention to a person having ordinary skill in the art. All of 
the investigations relied upon here were by persons having great 
talents and skills in this art, principally among them Dr. Bernauer, 
Dr. Cava, and Dr. Dreiding, all of whom hold a doctors degree 
in chemistry. The key to Plaintiffs invention was under the very 
nose of these three men. It takes no imagination, now that the 
invention has been made by Plaintiffs, to point out that if the 
Bernauer connector socket j had been omitted, and that stationary 
glass socket [not shown] located above the ball of connection j 
had been brought down to rest upon and engage the ball of the 
joint adaptor h, there would have been an air tight contamination 
free Teflon to glass rotating ball joint. They did not conceive of 
this. What they now say is obvious was not obvious to them at the 
time. It hardly becomes them after Plaintiffs have shown the way 
to a superior machine, to say that it was obvious at the time Plain- 
tiffs made their invention. The truth is that Plaintiffs invention 
was not obvious even to these skilled investigators. 

It is apparent that the trial court by the cavalier treatment given 
to the question of validity in the opinion at the end of the trial 
(R 509-510) did not take time to make the factual inquiries neces- 
sary to make the legal determination of invalidity, and did not 
follow the guiding procedures laid down in Graham v. John 
Deere (Supra) and so carefully followed by this Court (See Supra 
page 26). 

Defendants "Vapsilator" is a Chinese Copy of the Structure and 
Combination of Elements of the Claim in Suit 

One of the greatest compliments which can be paid to the 
validity and unobviousness of the invention of a patent, derives 
from the fact that the manufacture of the accused device did not 



I 



33 

follow the prior art, but actually reproduced and incorporated all 
of the structural features set forth in the claim of the patent in 
suit. The infringing "Vapsilator" is a Chinese Copy of the struc- 
ture and combination of the claim in suit (R 80, 81). 

Both prior to the trial (T 26, 27) in the Answers to Plaintiffs 
Interrogatories and during the trial, the Defendants were repeat- 
edly asked to point out where in the prior art there was any dis- 
closure which responded to the claim of the patent in suit. In 
the Request for Admissions, it was stated that there was no patent 
relied upon, and no prior publication which showed this combi- 
nation (Plf Ex 13 p. 4) . At the trial. Dr. Dreiding, a self-admitted 
expert in this field (R 385), stated that the closest prior art in 
his opinion was the Hormuth [Bernauer] evaporator which he 
and Dr. Bernauer had developed in Switzerland (R 300, 309, 
319, 396). The Bernauer [Hormuth] evaporator did not have 
a Teflon-to-glass rotating ball joint (R 364). It was Teflon-to- 
Teflon (R 34l). Dr Cava said Teflon-to-Teflon was essential (R 
264), Dr. Dreiding further testified that he did not want his 
testimony to include an inference that Teflon is the same as glass 
(R 425). So did Dr. Cava (R 261). The commercial rotary evap- 
orator "Vapsilator," which Chemophor Zurich began to market 
in 1965, five years subsequent to the marketing of Plaintiffs prod- 
uct under their invention in November of I960 (R 46), did not 
have a Teflon-to-Teflon rotating ball joint (R 408, 364) , but had 
instead a Teflon-to-glass rotating ball joint (R 408), the same as 
the claim. The "Vapsilator," likewise, did not have a glass rotat- 
ing shaft, but had a Teflon shaft (R 66) the same as the claim 
and which was new in this art. Both Teflon-to-glass junctures are 
the new features of and the structures called for in the claim in 
suit (R. 89) Neither the contamination free Teflon-to-glass ball 
and socket rotating joint, nor the Teflon-to-glass lower joint are 
to be found in the prior art according to Dr. Dreiding's testimony 
(R407, 410). 



34 

Defendants may deny the actual copying of the structure of 
the claim in suit, but the fact still speaks vociferously for itself, 
tliat the "Vapsilator," the commercial machine which Defendants 
manufactured and sold, did not follow the prior art upon which 
Defendants rely, but instead followed the structure of the claim 
in suit, a successful combination which had not previously existed. 

The manufacture of the "Vapsilator," did not follow the teach- 
ings of Dr. Bernauer, Dr. Dreiding or the German Utility Model, 
but instead, duplicated the structure, combination, and the teach- 
ings of Plaintiffs patent in suit (R 407-8, 410). This is the testi- 
mony of an interested party, Dr. Dreiding, who seeks to capture 
the United States market in rotary evaporators for his own Swiss 
company, by destroying a United States patent, and who, by his 
own admission, is an expert in this field. The obvious was not 
obvious to any one skilled in this art, even Defendants skilled, 
but biased witness. Dr. Dreiding. 

If the alleged prior art was good enough to destroy Plaintiffs' 
patent, then why was it not good enough for Dr. Dreiding to 
follow in producing the "Vapsilator"! 

The Presumption of the Validity of PlointifFs' Patent Is Unrebutted 

The presumption of validity of Plaintiffs patent as issued by 
the Patent Office could only be overcome by clear and convincing 
proof. Neff Instrument v. Cohu, 298 F(2) 82; 132 USPQ 98 (9th 
Cir. 1961), see also Hayes Spray Gun v. E. C. Brown Co., 291 
F.2d 319, 322; 129 USPQ 383, 386 (9th Cir. 1961). 

The presumption of validity is strengthened by the history of 
the patent in the Patent Office where the patent was granted only 
after considerable controversy and where the Patent Office consid- 
ered the most pertinent references before issuing the patent. 

National Sponge Cushion v. Rubber Corp., 286 F (2) 731; 

128 USPQ 320 (9th Cir. 1961 ). 
Ne§ Instrument v. Cohu, 298 F(2) 82; 132 USPQ 98 
(9th Cir. 1961). 



35 

The patent in suit was not issued without a struggle (Plf Ex 4) . 
No claims were allowed by the Examiner during the prosecution, 
and an appeal was taken to the Board of Appeals from the final 
rejection of all claims. The Patent Office considered the Buchler 
patent (Def Ex A-5), the Ueberwasser patent (Def Ex A-7) and 
numerous others but particularly the Buchler and Ueberwasser 
patents. One claim, the claim of the issue patent in suit, was al- 
lowed as a result of this appeal. Thus the pertinent art was before 
the Patent Office and the claim of the patent in suit was issued only 
after an appeal. 

It is true that the Bernauer Gebrauchsmuster was not a refer- 
ence. However, the presumption of validity attached to the claim 
is not impaired because the Gebrauchsmuster was not considered 
by the Patent Office as a prior patent during the time Plaintiffs 
application was in the Patent Office. A Gebrauchsmuster is best 
defined in Def Ex Y: 

"The German law, in addition to the regular patent law, 
provides for short term exclusive rights in new articles of 
manufacturer (processes and composition of matter being 
excluded) which might be of a lower order of inventive 
merit that is required for the longest term patent. These go 
by the name of 'Gebrauchsmuster' which word is customarily 
translated as 'utility model' and might also be translated as 
'useful article.' They are issued without search and the specifi- 
cations and drawings, while available to the public, are not 
issued in printed form." 

Even in Germany they do not constitute a reference against or 
have any efifect with respect to a corresponding German patent 
application directed to the same subject matter, XVII JPOS 376.* 
Thus in Germany they are not recognized as an anticipation for 
German patents. Inasmuch as the full specifications and drawings 
are not issued in printed form, they cannot be used as printed 



*Journal of the Patent Office Society. 



36 

publications anywhere. The only thing which is published is a 
notice of the registration. The notice of the Bernauer registration 
is reproduced at the bottom of page 2 in Defendants Exhibit R. 
The Patent Office practice since Ex parte Smith 82 USPQ 83, did 
not permit the use of a Gebrauchsmuster as a prior patent in the 
prosecution of a U.S. application. In Ex parte Smith 82 USPQ 83 
(P.O. Bd App — 1941) the issue was squarely, are Gebrauchs- 
musters patents. The Board held; (p. 83) 

"It is our view that Sections 4883-4886 should be construed 
together and that the protection afforded by Gebrauchsmusters 
is not patent protection within the meaning of our laws." 

In the Permutit Co. v. Graver Corp. Ail (2) 898; 7 USPQ 
51 (7th Cir— 1930) the Court held, (p 56) 

"The weight of authority seems to exclude the use of the 
entire Gebrauchsmuster as anticipation. But the courts are 
divided in the question." [citing cases]. " We have eliminated 
the two Gebrauchsmusters from our consideration of the 
case". 
In American Infra-Red v. Lambert 360 F(2) 977; 149 
USPQ 722 (8th Cir— 1966) the court stated: (p 732) 

"There are no judicial cases indicating how a Gebrauchs- 
muster should be treated under the provisions of § 102(d), 
and only scant authority as to how Gebrauchsmusters are to 
be treated under other provisions of our patent law." 

This court, however, held at page 734, that a Gebrauchsmuster 
was a patent within the meaning of the patent law, and there- 
fore, a statutory bar to the validity under 35 USC § 102(d) if 
directed to precisely the same combination of elements. 

It was not until September 27, 1965 that the Patent Office 
changed the rule and amended § 901.05(b) MPEP* to permit 



*Manual of Patent Examining Procedure, U.S. Dq?t. of Commerce. 
Patent Office 3rd Ed. (1961). 



37 
German registrations of Utility Models [Gebrauchsmusters] to be 
used as prior patents, but not as printed publications (Def Ex Y) . 
Ill The change in the rules occurred after the prosecution of the 
patent in suit, after the decision on Appeal, and after the Notice 
of Allowance (Def Ex K). Therefore at no time during the 
prosecution of the application resulting in the patent in suit was 
this Gebrauchsmuster a proper reference against Plaintiffs ap- 
plication. Since the propriety of a reference being called to the 
Patent Office's attention is determined as of the date of the 
prosecution, the failure of the examiner to refer to this Gebrauchs- 
muster registration in no way militates against the presumptive 
validity of Plaintiffs patent. At no time during the prosecution of 
the claim in suit was the Bernauer Gebrauchsmuster (Utility 
Model) a proper reference since it could not be used as a prior 
patent. 

The Patent Office did, therefore, consider the most pertinent art, 
and the prima facia validity of the claim in suit is not overcome. 

Commercial Success by Plaintiff Is Not Questioned 

Since Plaintiffs equipment made in accordance with the patent 
in suit was brought on the market its success has been phenomenal. 
The success was indiluted because Plaintiffs did not operate 
through salesmen or distributorships but relied solely on very 
simple and sparse advertising to acquaint chemists of the new 
equipment, the acceptance of this equipment by the industry has 
been immediate and continuous. The story of commercial success 
in the record commencing with the first sale November 16, I960 
(R A6) is told in the testimony of Dr. Rapoport (R 47-52). Such 
commercial success is a circumstance favorable to nonobviousness. 
There was no evidence to the contrary. 

Plaintiffs' Invention Filled an Urgent Need 

As a further indicia of nonobviousness Plaintiffs invention was 
born out of a need. The need and the activity of Dr. Hamlow and 



38 

Dr. Rapoport gave rise to this invention (R 25). These needs 
came out of the failure of other equipment to do the job and to do 
it properly. 

All of the secondary considerations showing nonobviousness 
are present in connection with Plaintiffs invention, all of them are 
uncontested by Defendants and all of them are in supplement to 
the basic factual determinations showing nonobviousness under 
§103. 



39 
CONCLUSION 

It was Plaintiffs who took the final step to make a rotary evapor- 
ator, air tight and contamination free and which turned prior 
failures into success. As was stated in The Barbed Wire Patent 
case, 143 U.S. 275 (1892). 

"Under such circumstances courts have not been reluctant to 
sustain a patent to the man who has taken the final step 
which has turned a failure into a success. In the law of 
patents it is the last step that wins." 

As is shown conclusively by the testimony, infringement by 
Defendants "Vapsilator" is tacitly admitted, and thoroughly 
proven. As to invalidity no effort was made by the trial court or 
Defendants counsel to follow the requirements for determining 
invalidity under § 103. When these requirements are examined 
and tested it is clear that there is no support for the holding of 
invalidity of the patent in suit under § 103. 

As indicated earlier Plaintiffs have already received judgment 
under 35 USC §§ 101 and 116. The defense of prior public use at 
the University of California under § 102(b) fails because the 
burden of proof is on the Defendants to show that the kind of use 
was sufficient to cause invalidity. Factually and under the decisions, 
this use was not proved. Therefore, there is no possible basis for 
the holdings of either noninfringement or invalidity of the patent 
in suit and the judgment of the trial court must be reversed. 

Respectfully submitted, 

Henry Gifford Hardy 

1811 Mills Tower 

San Francisco, California 94104 

415/362-3361 

Attorney for 

Plaintiffs- Appellants 



5-1 




32 


5-2 




90 


6 


41 


52 


7 


45 


52 



Appendix A 
PLAINTIFFS-APPELLANTS' EXHIBITS 

Exhibit Identified In Evidence Description 

1 17 Patent 3,219,099 in suit entitled "Rotary Evaporator 

and Separator" issued November 23, 1965. 

2 61 Rinco brochure for "Vapsilator Model M-70" show- 

ing imprint of Scientific Glass Apparatus Co., Inc. 

3 58 Scientific Glass Apparatus Co., Inc. advertisement, p. 

335, September 1966 issue of "The Vortex." 

4 57 Opinion of the Board of Appeals in the Patent Office 

dated November 25, 1964. 

5 26 Shop Order dated April 24, 1958 job No. 412— 

[First four pages] 

Shop Order dated May 6, 1958, job number 416. 

Original equipment made May 6, 1958. 

Drawing dated May 20, I960. 

Documents showing first sale of Plaintiffs equipment, 

(a) Stanford University Purchase Order No. US 

79605 dated November 16, 1960; (b) Chemquip 

Co., Invoice No. 100 dated December 9, I960 and 

(c) Stanford University check stub dated December 

13, I960. 

8 49 52 Chemquip Co. Rotary Evaporator catalog leaflet 

No. 1. 

9 50 52 Calab Model C Evaporator catalog sheet No. 2. 

10 51 52 Chemquip Rotary Evaporator Model 100, catalog 

leaflet No. 3. 

11 57 Instruction packing sheet for rotary evaporator dated 

March 25, 1961. 

12 64 Defendants' Responses to Plaintiffs' Requests for 

Admissions. 

13 64 Defendants' Answers to Plaintiffs' Interrogatories. 

14 157 Defendant Francis J. Rinderer Answers to Plaintiffs' 

Interrogatories. 

15 157 Defendant Scientific Glass Apparatus Corp. Answers 

to Plaintiffs' Interrogatories. 

16 81 Agreement dated September 21, 1965, between 

Chemophor Zurich and Rinco Instrument Co., Inc. 

17 59 Letter dated August 30, 1966. 

18 60 Letter dated September 2, 1966 from Scientific Glass 

Apparatus Co., Inc. to Dr. Rapoport. 

19 62 Notice of Infringement to Scientific Glass Apparatus 

Co., Inc. dated September 26, 1966 with registered 
mail receipt attached. 



A-1 


157 


A-2 


157 


A-3 


157 


A-4 


157 


A-5 


157 


A-6 


157 



2 Appendix 

Exhibit Identified In Evidence Description 

20 6} Letter dated September 29, 1966 from Scientific Glass 

Apparatus Co., Inc. to Dr. Rapoport. 

21 114 Blow-up enlargement of center page spread of 

Exhibit 2. 

22 114 Blow-up enlargement of the drawing of the patent 

in suit. 

DEFENDANTS-APPELLEES EXHIBITS 

Barotte U.S. Patent No. 440,752, issued 1890. 

Brown et al, U.S. Patent No. 2,536,676 issued 1951. 

Smith U.S. Patent No. 2,575,688 issued 1951. 

Rinderer U.S. Patent No. 2,797,747 issued 1957. 

Buchler U.S. Patent No. 2,865,445 issued 1958. 

Birchall, Jr. et al, U.S. Patent No. 2,876,895, issued 

1959. 
A-7 157 Ueberwasser et al, U.S. Patent No. 3,034,573, issued 

1962. 
A-8 157 French Patent No. 1,208,225 issued 1959. 

B 357 S. Ricklin, "Filled Teflon for Dry Bearings", Mate- 

rials and Methods, October 1954, page 112 to ll4. 

C Fieser and Fieser "Organic Chemistry," D.C. Heath 

&Co. (1950) page 957. 

D 348 L. C. Craig et al "Versatile Laboratory Concentra- 

tion Device," Analytical Chemistry, Vol. 22, No. 11, 
pg. 1462, November 1950. 

E 355 M.E. Volk "All-Glass Rotary Film Evaporator" Ana- 

lytical Chemistry, Vol. 27, No. 7, page 1207, July 
1955. 

F fNIE]* R. Brooks et al "Rotary film evaporator for laboratory 

use," Journal of Scientific Instrument, Vol. 28, page 
28 (1951). 

G [NIE]* W. Kirsten "Absorption Train for Determination of 

Carbon and Hydrogen," Mikrochem Acta 1953/1-2, 
pages 41-43. 

H 357 Von Metzsch, Chem-Ing.-Technik, Vol. 28, No. 1 

(1956) page 62. 

H-1 357 English Translation. 

I [NIE]* P. G. Howe "Greaseless Vacuum Rotor Seal" Labo- 

ratory and Shop Notes (1955) p. 625. 

J (excluded) 

K 158 Certified copy of file wrapper and contents of patent 

in suit No. 3,219,099. 



♦Not in evidence, but relied upon in the Pre-Trial Order (T 32-33). 



p-1 


307 


Q 


314 


Q-l 


315 


R 


160 


R-1 


160 


S 


359 



Appendix 3 

Exhibit Identified in Evidence Description 

L [NIE}* Sketch attached as Exhibit A to Defendants' Request 

for Admission Nos. 26, 27 and 28. 
M 158 PlaintiflFs' Responses to Defendants' Interrogatories 

Nos. 1-25. 
N 158 Plaintiffs' Answers to Defendants' Requests for Ad- 

missions Nos. 1-10. 
O 159 Plaintiffs' Answers to Defendants' Requests for Ad- 

missions Nos. 11-28. 
P 307 German Laboratory Text Method of Organic Chem- 

istry. 

English Translation. 

Bernauer Brochure. 

English Translation of Exhibit Q. 

Certified copy of German Gebrauchsmuster 

1,752,622. 

English Translation. 

Advertisement of Fischer & Porter Analytical Chem- 
istry December 1956. 
T 359 Fischer & Porter Stopsock — Analytical Chemistry p. 

66A Dec. 1956. 
U [NIE]** Fischer & Porter, Adv. Analytical Chemistry March 

1957. 

Page 149— Vol. 36, Jour, of Chem. Ed. March 1959. 

The journal of Teflon Vol. 1, No. 5, May I960, pp. 

1-8. 

Mechanical Engineering, pp. 883-884 Nov. 1953. 

Copies of pages 1 and 2 from the Official Gazette, 

United States Patent Office Volume 820 #1, dated 

Nov. 2, 1965. 

Deposition of Dr. Michael P. Cava. 

Xerox copy of Bernauer Brochure. 

English Translation. 

Drawing of German Gebrauchsmuster. 

English Translation of German Gebrauchsmuster. 

Print of drawing and parts list. 

Pencil Sketch. 

Print, same as Z-5 but clearer copy. 

Commercial Model of the "Vapsilator" charged to 

infringe. 

*Not in evidence, but relied upon in the Pre-Trial Order (T 32-33). 
** Noticed by Defendants 30 days before trial (T 37). 



V 


[NIE]** 


w 


[NIE]** 


X 


[NIE]** 


Y 


160 


Z 




Z-1 


219 


Z-2 


219 


Z-3 


219 


Z-4 


219 


Z-5 


219 


Z-6 


219 


Z-7 


219 


AA 


342 



Exhibit 
AB 



AC 

AD 
A£ 



Identified 



In Evidence 
161 



333 
333 
333 



Appendix 

Description 
Certified copy from records of U.S. Patent OfBce list- 
ing the Gebrauchsmuster issued including No. 
1,752,622. 

Prototype machine with one part missing. 
Prototype machine with one part missing. 
Prototype machine with one part missing. 



Appendix 5 

Appendix B 
OPINION BY TRIAL COURT (R 509-511) 

The Court: One of the problems that has bothered me R 509 
from die beginning of the testimony of Dr. Rapoport was tlie 
question of prior public use in the United States. 

The court finds that tlie use at the University of California 
of the 49 devices was a prior public use within the meaning 
of 35 United States Code Section 102 (b). 

The court further finds that tlie patent is invalid because of the R 510 
teaching of the prior art, particularly the Bernauer patent, because 
of tlie teachings that are set forth in Birchall and Buchler as 
showing connections of teflon against glass to accomplish a con- 
tamination free, frictionless connection. 

Judgment will be for the defendants. 

Would you prepare the findings of fact and conclusions of 
law for the judgment? 

Mr. Moore: Is there any ruling on the question of infringe- 
ment if in the event there was a reversal of the judgment — 

The Court: The court will further find that there is no 
infringement of the use of the combination of substances set 
forth in the Hamlow-Rapoport patent because of the apparent 
required use of the lubricant at the connection in the ball and 
socket as recommended and because of the lack of evidence of 
the lack of necessity of such a lubricant at those points. 

Mr. Moore: Your Honor, about the point of low vacuum 
source. That was another contention that we stated, avoided 
infringement because the claim calls for and there is no proof. 

The Court: I think that it is fairly implicit in the advertis- 
ing that the court could draw an inference that there is a 
low vacuum source. 

Mr. Moore: There is no question that the device if used R 511 
is to be so used but there is no proof that it has been so used. 
That is my point. 



6 Appendix 

The Court: I do not think I am ready to so find in that 
respect. 

Thank you, gentlemen. 

Mr. Hardy: Thank you, your Honor. 

Mr. Moore: Thank you. 

Mr. Kriegel: Thank you, your Honor. 






iSai 



APPENDIX C 



DRAWING OF PLAINTIFFS APPARATUS 



-39 



J8n 




r-s 





'^/////^yy. 



2"' ^30 



?.b 



^ 



•S^222^^^^ 



.:L^:i^STJ^irl!f 



Supportlos <Mtal fram^ 



{•..^ ■ .. ■ '■:■ ■ ■■ . : ■ 

5? '.':;-• :'■':. ■■■•'■■■•'■,■ 
Couatat'o^ soelcet wt'i i .. 
Joint- of :T|f(^on , ' . T • 

' >.;V •> !^ ■/:•''■ '■ ■ • '• '■ " ■..• • ■ ' 

9qih« i|()«pCpr tap«i'«d'<-r- 
;■ ftenu» aad .s|ihart.&fti ball - 
I -Jolntr, of' Teflon : ,. 



> Conneeting {tlecA- of 
glass .; , „. ■ . 

' . Hollow shaft el> .Bk'eelS- 

-44 .:• .]>i!&kplat« ot «| 
light laetal.' 
Supporting .'■'*— : — K?. ^., 



y z um KOhLe r, z ur Vakuumleitun Q 



'42a 



23 



' Bill' bearlixg carrying "Xr 
-.abaft. f; 



Bvaporatloii' veMalc 
•of glass 




^pportlng aetal' 
^..rraa? 






•DRAWING OP BERNAUER 
'■'■■'";"• A-PPARATUS , 



Rotations - Dunnschichteneindampfer nach Dr. K. Bemauer 



INVeSTOHS 
HENRY RAPOPOFfT 

HARLAN P HAMLOW zur Oebrauchsmusteranmeidung /om V7. 7. 57 

**''»- * ■ ' " der Firma L Hormuth , Jnh. W.E. /etter, WiesLoch / Badtn 



6 Appendix 

The Court: I do not think I am ready to so find in that 
respect. 

Thank you, gentlemen. 

Mr. Hardy: Thank you, your Honor. 

Mr. Moore: Thank you. 

Mr. Kriegel: Thank you, your Honor. 



Appendix D 



CLAIM OF THE PATENT IN SUIT 

BaroHe Brown Smith 

440,752 2.536.676 2,575,688 

(R157) (R157) (R!57) 

A-1 A-2 A-3 

Apparatus for separating and removing vola- 
tile substances from a composition, in com- 
bioation 

(a) A housing X* X X 

(b) A shaft made of polyfluorovinyl resin NO NO NO. 

metal 

(c) rotatably mounted in said housing 
and with both of its ends extending 

beyond the limits of said housing.... NO NO X 

(d) said shaft having a passage of sub- 
stantially uniform diameter extend- 
ing axially through the entire length 

thereof NO NO NO 

(e) said shaft having one end thereof 
removably securing a flask in airtight 

engagement for rotation therewith—. NO NO X 

ff) said shaft having its opposite end 

formed as the ball portion of a ball 

and socket joint NO NO NO 

(g) A separately mounted glass fixed mem- 
ber, [non-rotating] NO NO X 

(h) having an axial passage tiierethrough 

of substantially the same diameter.... NO NO NO 

ii] terminating with the socket portion 

of the ball and socket joint rotatably 

receiving and seating the said ball 

» portion of said shaft in airtight self- 
lubricating engagement and with 
their respective passages in align- 
ment ..._ NO NO NO 

ill Exhaust means communicating with the NO NO 

passage in said fixed member connected but not so but not so 

to a source of low pressure, and connected connected 

(It) Drive means mounted in said housing for X X 

rotating said shaft but no shaft solid shaft X 

X means that the element of the claim is present in some form. 

I 



PRIOR ART RELIED UPON BY DEFENDANTS 



Rinderer 

2,797,747 

(R 157) 

A-4 



X 

X 



Buchler 

2,865,445 

(R 157) 

A-5 



Bircliall 

2,876,985 

(R 157) 

A-6 



Ueberwasser 
3,034,573 
(R 157,365) 

A-7 



NO 
yes 
NO 



NO 

base 
portion 



NO 



yes 

yes — but 

not w. plug 



NO 
X 
NO 



X 
X 



NO 



NO 



NO 

X 
X 



Cibd-French 
1,208,225 
(R157) 

A-8 



NO 
X 
NO 



NO 

X 

X 



Craig and 
Hausmann 
(R 349) 



X 


X 


NO 


X 


X 


X 


NO. 


NO 


plug 


glass 


glass 


NO 


metal 












X 












not so 












mounted 


NO 


X 


X 


X 


NO 


X 












not all 












the way 


NO 


NO 


NO 


NO 


NO 



NO 

NO 
yes 
NO 



E-glass 
to glass 
ball joint 



M. E. Volk 
(R 355) 



Partridge 
F 



X 

NO 

stainl. steel 



NO 
X 
NO 



NO 

X 
X 



Miltrochemica 



NO 

NO 



von Metrsch 
(R 356) 



NO 

NO 

NO 
NO 
NO 



NO 

NO 

NO 



Sketch 

L 



X 

NO 

glass Teflon 



Bernauer 
Brochure 
(R314) 



Bernauer 
Gebrauchs- 

muster 

(R 159, 301, 

364) 



X 

glass 



Myer and 

Reed 

Modllicallon 

Z-7 



X 

glass 



NO 



NO 



X 




X 




X 


glass to glass 




glass to glass 


«l 


ass to glass 


X 




No. 




NO. 


Teflon 




Teflon 




Teflon 


Adapt. 




adapter 




adapter 


X 


X 


X 

NO 




X 
NO 



X 






X 


glass to 




NO 


glass to 


Teflon 






Teflon 


X 


X 


X 


X 




X 


X 


X 



/ 



/ 



Nos.22,753 and 22,811 



IN THE 



UNITED STATES COURT OF APPEALS L 1 ^^"'^ 



FOR THE NINTH CIRCUIT 



National Labor Relations Board, 
Petitioner 



The Deutsch Company, 

Electronic Components Division, 

Respondent 



on petition for enforcement and on petition 
TO review and set aside an order of the 

NATIONAL LABOR RELATIONS BOARD 



BRIEF FOR THE NATIONAL LABOR RELATIONS BOARD 



FILED 

JUN2 81968 

WM. B. LUCK. CLERK 



Arnold Ordman, 

General Counsel, 

Dominick L. Manoli, 

Associate General Counsel, 

Marcel Mallet-Prevost, 
Assistant General Counsel, 

Paul J. Spielberg, 

Attorney, 
National Labor Relations Board. 



Washingion. D, C. • THIEL PRESS 202 393-0625 



(i) 

INDEX 

Page 

JURISDICTION 1 

STATEMENT OF THE CASE 2 

I. The Board's finding of fact 2 

A. Background 2 

B. Interference, restraint and coercion 4 

1. June 1 and 2— threats of discharge 4 

2. June 3— interrogation and warnings of discharge 4 

3. July 8-disciplinary layoffs 7 

4. July 14-the Company assists employees to withdraw Un- 
ion support 7 

II. The Board's conclusions and order 8 

ARGUMENT 9 

I. Substantial evidence on the record as a whole supports the 
Board's findings that the Company violated Section 8(a)(1) and 
(3) by maintaining and enforcing an unlawful no-solicitation 

and no-distribution rule 9 

II. Substantial evidence on the record as a whole supports the 
Board's finding that the Company violated Section 8(a)(1) by 

inducing employees to revoke their authorization cards 14 

CONCLUSION 17 

APPENDIX A 18 

APPENDIX B 19 

AUTHORITIES CITED 

CASES : 

Campbell Soup Co. v. N.L.R.B., 380 F.2d 372 (C.A. 5) 10 

Hendrix Mfg. Co. v. N.L.R.B., 321 F.2d 100 (C.A. 5) 15 

F. C. Huyck & Sons. 125 NLRB 271 15 

Irving Air Chute Co., Inc. V.N.L.R.B., 350 F.2d 176 (C.A. 2) 16 

Lakeland Cement Co.. 130 NLRB 1365 15 

Local 542, Operating Engineers v. N.L.R.B., 328 F.2d 850 (C.A. 3), 

cert, den., 379 U.S. 826 15 

Melville Confections v. N.L.R.B., 327 F.2d 689 (C.A. 7), cert, den., 

377 U.S. 933 15 



at) 

CASES-Cont'd Page 

Movie Star, Inc., 145 NLRB 319, enfcl, 361 F.2d 346 (C.A. 5) 15 

Murray Envelope Corp., 130 NLRB 1574 15 

N.L.R.B. V. Babcock & Wilcox Co., 351 U.S. 105 12 

N.L.R.B. V. Birmingham Pub. Co., 262 F.2d 2 (C.A. 5) 15 

N.L.R.B. V. V. C. Britton Co., 352 F.2d 797 (C.A. 9) 15 

N.L.R.B. V. Brookside Industries, Inc., 308 F.2d 224 (C.A. 4) 16 

N.L.R.B. V. Burnup & Sims, Inc., 379 U.S. 21 15 

N.L.R.B. V. Clearfield Cheese Co., 213 F.2d 70 (C.A. 3) 16 

N.L.R.B. V. Elias Bros. Big Boy, Inc., 327 F.2d 421 (C.A. 6) 15 

N.L.R.B. V. Essex Wire Corp., 245 F.2d 589 (C.A. 9) 10 

N.L.R.B. V. Ford, 170 F.2d 735 (C.A. 6) 15 

N.L.R.B. V. 111. Tool Works, 153 F.2d 811 (C.A. 7) 15 

N.L.R.B. V. Link-Belt Co., 311 U.S. 584 15 

N.L.R.B. V. Miller, 341 F.2d 870 (C.A. 2) 9, 16 

N.L.R.B. V. Raymond Pearson, Inc., 243 F.2d 456 (C.A. 5) 16 

N.L.R.B. V. Rockwell Mfg. Co., 271 F.2d 109 (C.A. 3) 13 

N.L.R.B. V. Southwire Co., 352 F.2d 346 (C.A. 5) 9 

N.L.R.B. V. Syracuse Color Press, Inc., 209 F.2d 596 (C.A. 2), cert. 

den., 347 U.S. 966 15 

N.L.R.B. V. TRW-Semiconductors, Inc., 385 F.2d 753 (C.A. 9) 16 

N.L.R.B. V. United Aircraft Corp., 324 F.2d 128 (C.A. 2), cert, den., 

376 U.S. 951 10, 13 

N.L.R.B. V. United Steelwrkrs. of Am., CIO (Nutone, Inc.), 357 U.S. 

357 13 

N.L.R.B. V. Willow Maintenance Corp., 332 F.2d 367 (C.A. 2) 9 

Peyton Packing Co., 49 NLRB 828, enfd 142 F.2d 1007 (C.A. 5), 

cert, den., 323 U.S. 730 10 

Republic Aluminum Co. v. N.L.R.B., _ F.2d _ (C.A. 5) (en banc), 
68 LRRM 2090 (No. 22,716, AprU 25, 1968), vacating, 374 F.2d 

183 10, 12, 13 

Republic Aluminum Co. v. N.L.R.B., 374 F.2d 183 (C.A. 5) 12 

Republic Aviation Corp. v. N.L.R.B., 324 U.S. 793 10, 12, 13 

Time-0-Matic, Inc. v. N.L.R.B., 264 F.2d 96 (C.A. 7) 13 

United Steelwrkrs. of Am., AFL-CIO (Luxaire, Inc.) v. N.L.R.B.. _ 
F.2d _ (C.A. D.C.), No. 21043, decided March 19, 1968, 67 

LRRM 2813 13 



(Hi) 

Page 



STATUTE: 



National Labor Relations Act, as amended (61 Stat. 136, 73 Stat. 519, 

29 U.S.C, Sees. 151, et seq.) 1 

Section 7 8 

Section 8 (a) (1) 2, 9, 14 

Section 8 (a) (3) 2, 9 

Section 10 (e) 1 

MISCELLANEOUS : 

84th Cong. Rec, 76th Cong., 1st Sess. (1939) A. 2053 15 

H.R. No. 245 on H.R. 3020, 80th Cong., 1st Sess. (1947), p. 28 14 

Senate Comm. on Education & Labor Hearings on S. 2958, 74th 

Cong., 1st Sess. (1935), pp. 713-714, 558, 305 14 



I 



IN THE 

UNITED STATES COURT OF APPEALS 

FOR THE NINTH CIRCUIT 



Nos. 22,753 and 22,811 

National Labor Relations Board, 
Petitioner 



The Deutsch Company, 

Electronic Components Division, 

Respondent 



ON PETITION for ENFORCEMENT AND ON PETITION 

TO REVIEW AND SET ASIDE AN ORDER OF THE 

NATIONAL LABOR RELATIONS BOARD 



BRIEF FOR THE NATIONAL LABOR RELATIONS BOARD 



JURISDICTION 
This case is before the Court upon the petition of the National 
Labor Relations Board, pursuant to Section 10(e) of the National 
Labor Relations Act, as amended (61 Stat. 136, 73 Stat. 519, 29 
U.S.C., Sees. 151, et seq.)J for enforcement of its order (R. 64-65, 
19-35)^ issued on May 31, 1967, against the Company. The Com- 

'^The pertinent statutory provisions are reprinted in Appendix A, infra, 
p. 18. 

^References to the pleadings, decision and order of the Board, the Trial 
Examiner's recommended decision and order, and other papers reproduced as 



pany has also filed a petition to review and set aside the Board's 
order. The Board's Decision and Order are reported at 165 NLRB 
No. 5. This Court has jurisdiction of the proceedings, the unfair 
labor practices having occurred in Banning, California, where the 
Company is engaged in the production and sale of miniature elec- 
trical connectors used in the aerospace industry. No question of 
jurisdiction is presented. 

STATEMENT OF THE CASE 

I. THE BOARD'S FINDING OF FACT 

Briefly, the Board found that the Company violated Section 
8(a)(1) of the Act by maintaining and enforcing an unlawful no- 
solicitation and no-distribution rule, and by improperly assisting its 
employees to withdraw their support from the Union.-^ The Board 
also found that the Company violated Section 8(a)(3) by imposing 
disciplinary suspensions on two employees who breached its invaUd 
no-solicitation and no-distribution rule. The facts on which these 
findings rest are summarized below. 

A. Background 
The Company has instituted certain security measures designed 
to safeguard valuable metals used in production and to quahfy the 
Company for classified work (R. 22; Tr. 17-19, 185-186). Thus, a 



Volume I, pleadings, are designated "R". References to portions of the steno- 
graphic transcript reproduced pursuant to the rules of this Court are designated 
"Tr." "G.C. Exh." refers to the General Counsel's Exhibits, "R. Co. Exh." re- 
fers to respondent Company's Exhibits, and "Jt. Exh." refers to those exhibits 
introduced jointly by the parties. References preceding a semicolon are to the 
Board's findings; those following are to supporting evidence. 

•^United Steelworkers of America, AFL-CIO. 



"security area," enclosed with steel fencing topped with barbed wire, 
surrounds all the production facilities of the plant. Most employees 
enter the plant through the east gate which is between the Company's 
private parking lot and the "security area." Some employees use 
the north gate which affords entrance to the "security area" from a 
public street (R. 20; Tr. 67-69, 178-182). Identification badges are 
required for admittance to the plant and guards check lunch boxes, 
brief cases and packages carried by persons leaving the plant (R. 22; 
Tr. 187-192). 

The Company was initially granted a security clearance by the 
Department of Defense on February 27, 1961. This clearance was 
administratively terminated on June 27, 1966, but was reissued on 
October 26, 1966. However, during the relevant period of May, 
June and July of 1966, no work of a classified nature was being 
performed by the Company (Tr. 12-14, 22-23). 

In 1 962 the Company began distributing to new employees a 
booklet entitled "Welcome" which set forth the Company's history 
and policies, including the following rule about solicitation (R. 21; 
Jt. Exh. 2): 

COLLECTIONS AND GIFTS: 

The sohcitation of funds for any purpose, the sale of 
tickets for all purposes, the operation of lotteries and 
raffles, and the solicitation of membership in organiza- 
tions during working hours on Company property are 
absolutely prohibited. 



B. Interference, restraint and coercion 

1 . June 1 and 2— threats of discharge 
On June 1, 1966,'^ Company employees began distributing au- 
thorization cards on behalf of the Union. On that day, employees 
Charles CalHhan, Mark Grim and Daniel Salcido distributed authori- 
zation cards to employees both outside and inside the north gate 
prior to the commencement of work (R. 23; Tr. 66-69, 109-1 10). 
Shortly thereafter, the men decided to split up and Salcido headed 
for another gate. While crossing a field on Company property he 
handed an authorization card to a fellow employee. The guard 
yelled at him, "Hey, don't do that. You'll get fired for doing 
that" (R. 25; Tr. 110). Salcido then attempted to pass out cards 
outside the east gate, but the guard directed him to move further 
down the road (R. 25; Tr. 110-111). On June 2, before work be- 
gan, Callihan alone was distributing cards outside the east gate when 
a guard said to him that he "could get in trouble doing that" (R. 
23; Tr. 69-71). 

2. June 3— Interrogation and warnings of discharge 
On June 3, before work began, Callihan and Grim distributed 
cards inside the east gate. Jan Winterbourne, assistant personnel 
manager and security officer approached, told the men they could 
get into trouble for this activity and suggested that they pass out 
the cards on the other side of the gate. When Callihan said that 
they would remain where they were, Winterbourne handed him the 
following warning notice (R. 23; Tr. 71-73, 199-202, G.C. Exh. 3): 



All dates hereafter refer to 1966. 



It is forbidden to hand out Union literature within 
the Deutsch plant during working hours or rest peri- 
ods. This decision is based upon the National Labor 
Relations Board Rules and Regulations. Continued 
infraction will lead to dismissal. 

Winterbourne attempted to hand a copy to Grim but Grim refused 

to accept it (R. 23; Tr. 201).^ 

That same morning, before work commenced, employees Sal- 

cido, Pacheco and Carrilio distributed cards outside the north gate. 

George Stanley, the Company's personnel manager, approached them, 

asked if they knew what they were doing, and gave each of them a 

warning notice which read as follows (R. 25; Tr. 111-113, 130-133, 

146-149, G.C. Exh. 4): 

It is forbidden to distribute Union literature within 
the Deutsch plant. This decision is supported by the 
Rules and Regulations of the National Labor Relations 
Board. 

The sohcitation of membership in organizations during 
working hours is expressly prohibited on page 1 5 of 
the Deutsch Indoctrination Manual given to employees 
when they are hired. Continued infraction will lead to 
dismissal. 

Stanley then warned them not to bring the union cards inside the 
plant; the men placed the cards in Pacheco's truck before clocking 
in (R. 29; Tr. 113, 133, 149-150).'^ 

Soon after CaUihan received the warning notice from Winter- 
bourne, he was called into an office and introduced to personnel 



■^A similar notice had been posted on the plant bulletin board (R. 28; 
Tr. 83-84, 117-118). 

'^The warning notices to Carillo and Pacheco were subsequently withdrawn 
(R. 25; Tr. 126-127, 138-140, 162-164). 



manager Stanley. Stanley told Callihan that it was "against the 
Company policy to go to work and hand out any Hterature or any 
solicitation of any kind and distribution of any kind on Deutsch 
property" (R. 26; Tr. 219-220). Stanley then handed CalHhan a 
warning notice similar to the ones given to Salcido, Carrillo and 
Pacheco. CaUihan showed Stanley the notice he had been given 
earlier and refused to sign the second warning notice when asked to 
do so by Stanley. Stanley then asked Callihan what his intentions 
were and Callihan said that he "would keep passing out cards until 
I run out of cards or get fired." Stanley finally responded, "Well, 
if you're here doing this Monday morning, you won't be around no 
more" (R. 26; Tr. 76-77). 

That morning Salcido, too, was called into an office for an in- 
terview with Stanley. After retrieving the warning notice he had 
given Salcido earlier in the day, Stanley asked Salcido whether that 
was the first day he had passed out union literature. Salcido said 
no. Stanley asked, "Was it yesterday?" Salcido again said no, that 
he had passed out Union literature on June 1 . Salcido then refused 
to sign a warning slip, and told Stanley that he had not passed out 
Union Hterature inside the gate. Stanley pointed to the union but- 
ton Salcido was wearing and said "you tell the people that gave 
you that button that we're not fooling. We don't care about the 
National Labor Relations Board. If you're out there Monday morn- 
ing we're going to fire you. It'll take at least three months before 
we get into court, and what will you be doing during that time? 
You think it over" (R. 27; Tr. 113-115). 



3. July 8— disciplinary layoffs 
On Friday, July 8, Callihan and Salcido handed out authoriza- 
tion cards in the Company lunchroom during their respective lunch 
periods (R. 29; Tr. 79-80, 1 19-120). Shortly after lunch, Callihan 
and Salcido were separately summoned to the personnel office 
where Ken Moyer, the new personnel manager, gave them discipli- 
nary layoffs until the following Wednesday for distributing cards in 
the lunchroom (R. 29; Tr. 80-83, 120-121, 205-208, 225-226, 250- 
252). 

4. July 14— the Company assists employees to 
withdraw Union support 

On July 14 the Company sent a letter to its employees accus- 
ing the Union of "bamboozl[ing] " employees into soliciting on its 
behalf, and also accusing these solicitors of "forc[ing] Union authori- 
zation cards upon the employees in the lunchrooms." (R. 29-30; 
Tr. 61-63, G.C. Exh. 2). Accompanying the letter was a stamped 
postcard addressed to the National Labor Relations Board which ad- 
vised the Board that the signer had executed a Steelworkers authori- 
zation card "because of misinformation or duress" and concluded: 
"I hereby revoke my authorization for all purposes." (R. 29; G.C. 
Exh. 2a). The letter also said (R. 30; G.C. Exh. 2): 

If you have changed your mind, been misinformed, 
coerced, threatened, intimidated into signing an au- 
thorization card OR if you think someone may have 
sent in a card with your name on it, you can revoke 
that card by mailing the enclosed postcard. 



8 



II. THE BOARD'S CONCLUSIONS AND ORDER 

On the basis of the foregoing facts, the Board found that the 
Company maintained and enforced unlawfully broad limitations on 
solicitation and on distribution of union literature by posting rules 
prohibiting such activities in non-work areas and on non-work time; 
by issuing warning notices to employees who disobeyed these rules; 
and by threatening such employees with discipUne or discharge— all 
in violation of Section 8(a)(1) of the Act. The Board also found 
that the Company violated Section 8(a)( 1 ) by unlawfully assisting 
employees to revoke their union authorization cards. Finally, the 
Board found that the Company violated Section 8(a)(3) by laying 
off employees Salcido and Calhhan because they engaged in pro- 
tected activity which was prohibited by the Company's unlawful 
rules (R. 13-14). 

The Board's order directs the Company to cease and desist 
from the unfair labor practices found, and from in any like or re- 
lated manner interfering with, restraining or coercing its employees 
in the exercise of their Section 7 rights. Affirmatively, the Com- 
pany is required to make Salcido and Calhhan whole for any loss 
of earnings they may have suffered as a result of the unfair labor 
practices, to withdraw from personnel files of employees warning 
notices or other disciphnary notations attributable to the Company's 
unlawful rules, and to post the appropriate notices (R. 14-15). 



ARGUMENT 

I. SUBSTANTIAL EVIDENCE ON THE RECORD AS A WHOLE 
SUPPORTS THE BOARD'S FINDINGS THAT THE COMPANY 
VIOLATED SECTION 8(a)(1) AND (3) BY MAINTAINING 
AND ENFORCING AN UNLAWFUL NO-SOLICITATION AND 
NO-DISTRIBUTION RULE 

There is no dispute that as soon as the Union's organizing cam- 
paign began, the Company invoked a rule forbidding employees to 
solicit for the Union or to distribute campaign material anywhere 
on the plant premises during rest periods, lunch breaks, prior to 
work or at any other time. Nor is it disputed that the Company 
enforced these restrictions by threatening employees with discipline 
or discharge for disobeying them; by issuing warning notices to em- 
ployees for distributing union hterature just inside the plant gates 
before the start of work; by interrogating employees about whether 
they had or would violate the restrictions; and by imposing discipli- 
nary lay-offs on two employees who distributed union cards in the 
plant lunch room during their respective lunch breaks. If, as we 
show, the Company's rule imposed unjustifiable restraints upon its 
employees' organizational activities, the Board properly found that 
its threats and warnings violated Section 8(a)(1) and that its suspen- 
sion of CaUihan and Salcido for passing out cards in the lunchroom 
violated Section 8(a)(3) of the Act.^ 

It is well established that an employer's prohibition of sohci- 
tation or distribution of literature on behalf of a union during non- 
working time in nonwork plant areas is presumptively invahd. The 
Board's policy on this subject was approved by the Supreme Court 

^E.g., N.L.R.B. V. Miller-Charles & Co., 341 F.2d 870, 874 (C.A. 2); 
N.L.R.B. V. Southwire Co., 352 F.2d 346, 348 (C.A. 5); N.L.R.B. v. Willow 
Maintenance Corp., 332 F.2d 367, 368 (C.A. 2). 



10 



in Republic Aviation Corp. v. N.L.R.B., 344 U.S. 793, 803, n. 10, 
quoting from Peyton Packing Co., 49 NLRB 828, 843-844, enforced, 
142 F.2d 1009, 1010 (C.A. 5), cert, denied, 323 U.S. 730, as fol- 
lows: 

The Act, of course, does not prevent an employer 
from making and enforcing reasonable rules covering the 
conduct of employees on company time. Working time 
is for work. It is therefore within the province of an em- 
ployer to promulgate and enforce a rule prohibiting union 
sohcitation during working hours. Such a rule must be 
presumed to be vahd in the absence of evidence that it 
was adopted for a discriminatory purpose. It is no less 
true that time outside working hours, whether before or 
after work, or during luncheon or rest periods, is an em- 
ployee's time to use as he wishes without unreasonable 
restraint, although the employee is on company property. 
It is therefore not within the province of an employer 
to promulgate and enforce a rule prohibiting union soli- 
citation by an employee outside of working hours, al- 
though on company property. Such a rule must be pre- 
sumed to be an unreasonable impediment to self- 
organization and therefore discriminatory in the absence 
of evidence that special circumstances make the rule 
necessary in order to maintain production or discipline 
(emphasis supplied). 

Accord: N.L.R.B. v. Essex Wire Corp., 245 F.2d 589, 593 (C.A. 

9); Republic Aluminum Co. v. N.L.R.B., F.2d (C.A. 5) {en 

banc), 68 LRRM 2090 (No. 22,716, April 25, 1968), vacating 374 
F.2d 183; Campbell Soup Co. v. N.L.R.B., 380 F.2d 372, 373 (C.A. 
5); N.L.R.B. v. United Aircraft Corp., 324 F.2d 128, 130-131 (C.A. 
2). 

At the hearing, the Company contended that its total ban on 
union activity at the plant was justified by "security" needs arising 



II 



from its use of valuable metals and its occasional handling of classi- 
fied work.'^ In explanation, Supervisor Winterbourne testified that the 
distribution of union literature inside the gate might cause congestion 
and thereby interfere with the guard's checking of badges. However, 
traffic averaged only ten employees a minute at the beginning of the 
shift, with no more than six approaching the gate at the same time 
(R. 24; Tr. 270, 237, 241 ; R. Exh. 2(a)-2(i)). This small volume of 
traffic was hardly calculated to cause disorder at the gates even if 
the solicitors had stationed themselves immediately inside. And, had 
congestion developed, the solicitors could have been relocated a little 
further from the gate. Significantly, neither the guards nor Com- 
pany officials ever indicated to the sohcitors that fear of congestion 
was behind the broad ban on solicitation and distribution. On the 
other hand, Company representatives several times interfered with 
solicitors even though they were outside the gates where no prob- 
lem of congestion could arise. Under these circumstances, the Board 
properly found that the Company had failed to establish that its ban 
against the distribution of union cards inside the gates was "imposed 
because of traffic situation at the gate," and that in any event prob- 
lems created by such activity "would not justify the broad prohibi- 
tion" the Company sought to maintain (R. 24). 

The Company's attempt to justify its interference with employ- 
ees who sought to pass out union cards in the lunchrooms has even 
less substance. According to the Company, it feared that if cards 



■^As noted in the Statement, the Company was not engaged in classified 
production at the time of the events herein. 



12 



were distributed in the plant it might inadvertently commit an un- 
fair labor practice when its gate guards discovered them in employ- 
ees' brief cases and lunch boxes. But, as the Board said, "An inad- 
vertent discovery of an authorization card in the possession of an 
employee would not be considered an unfair labor practice, and the 
prohibition against bringing cards into the plant and distributing 
them in nonwork areas during nonworking time is not justified as 
a means of avoiding the inadvertent discovery of the cards" (R. 
29). 

The Company also argued before the Board that its rule was a 
permissible Umitation on organizational activities at the plant because 
other avenues of communication with employees were available to 
the Union. However, the availabihty of alternative channels of com- 
munication is a relevant consideration only where nonemployees 
seek to solicit or distribute union hterature on Company property. 
While an employer may prevent such activity on his property if 
other methods are available, "[n]o restriction may be placed on the 
employees' right to discuss self-organization among themselves, un- 
less the employer can demonstrate that a restriction is necessary to 
maintain production or discipline." N.L.R.B. v. Babcock & Wilcox 
Co., 351 U.S. 105, 112-113. Earlier, m Republic Aviation, supra, 
324 U.S. at 798-799, the Supreme Court found similar rules unlaw- 
ful even though in neither of the two cases decided could it "prop- 
erly be said that there was evidence or a finding that the plant's 
physical location made solicitation away from company property in- 
effective to reach prospective union members." Moreover, Republic 
Aluminum Co. v. N.L.R.B., 374 F.2d 183 (C.A. 5), heavily relied 
upon by the Company, has recently been reversed by the Fifth Cir- 



13 



CLiit, sitting en banc, supra, p. 10, 68 LRRM 2090. Under circum- 
stances similar to those here, the Fifth Circuit held that the General 
Counsel need not show that alternative methods of solicitation were 
lacking. 68 LRRM at 2092. Furthermore, of the other four circuits 
faced with this specific contention, three have rejected it. United 
Steelworkers of America, AFL-CIO (Luxaire, Inc.) v. N.L.R.B., 
_ F.2d _ (C.A. D.C., No. 21,043, decided March 19, 1968, 67 
LRRM 2813, 2814, 28\5); N.L.R.B. v. United Aircraft Corp., 324 
F.2d 128, 130 (C.A. 2), cert, denied, 376 U.S. 951; Time-0-Matic, 
Inc. V. N.L.R.B., 264 F.2d 96, 101 (C.A. 7); contra, N.L.R.B. v. 
Rockwell Mfg. Co., 271 F.2d 109 (C.A. 3).^ 

In sum, the Company has failed to show that specific circum- 
stances existed which justified its presumptively invalid total prohi- 
bition of distribution and solicitation on behalf of the Union at the 
plant, or that any other reasons call for a reversal of the Board's 
conclusion that the Company's ban violated Section 8(a)(1) of the 
Act. 



^Rockwell turns on the Third Circuit's conclusion that the Supreme Court 
in N.L.R.B. v. United Steelworkers Union of America, CIQ (Nutone), 357 U.S. 
357, made the existence of adequate alternative means of solicitation a relevant 
consideration in appraising any no-solicitation rule, although its earlier decisions 
in this area, as shown, had expressly held otherwise. In rejecting this reading of 
Nutone, the Fifth Circuit pointed out {Republic Aluminum, supra, 68 LRRM at 
2092) ihdii Nutone "does not purport to overrule or modify Republic Aviation" 
and expressed its reluctance to "read into [Republic Aviation] such a serious 
modification" of settled law. 



14 



II. SUBSTANTIAL EVIDENCE ON THE RECORD AS A WHOLE 
SUPPORTS THE BOARD'S FINDING THAT THE COMPANY 
VIOLATED SECTION 8(a)(1) BY INDUCING EMPLOYEES TO 
REVOKE THEIR AUTHORIZATION CARDS 

As the Statement shows, on July 14 the Company sent its em- 
ployees a letter suggesting that coercion and deception were the 
Union's organizational stock in trade, and advising that employees 
who had been "misinformed, coerced, threatened, [or] intimidated 
into signing an authorization card," could revoke it by maihng to 
the Board "the enclosed postcard." The postcard, stamped and ad- 
dressed to the Board's Twenty-First Region in Los Angeles, informed 
the Board that the signer "revoke [d his] authorization for all pur- 
poses." The Board found nothing unlawful in the letter but prop- 
erly held that the distribution of the revocation forms, without any 
request from the employees, violated Section 8(a)(1) of the Act. 

It is an unfair labor practice under Section 8(a)(1) of the Act 
for an employer "to interfere with, restrain, or coerce" employees 
in their choice of a bargaining agent. The language and legislative 
history of Section 8(a)( 1 ) show that Congress intended the terms 
"interfere," "restrain," and "coerce" to have separate and distinct 
meanings.^^ In banning "interference" Congress clearly meant to 
proscribe any employer activity which might limit employees in the 
exercise of their statutory rights.^^ "The test is whether the em- 



^^See Senate Committee on Education and Labor, Hearings on S. 2958, 
74th Cong., 1st Sess. (1935) pp. 713-714, 558, 305; H.R. No. 245 on H.R. 
3020, 80th Cong., 1st Sess. (1947) p. 28. ^ 

^^ Looking back after four years of experience under the Wagner Act, at 
a time when amendments to Section 8(a)(1) were urged but not adopted, Sen- 
ator Wagner made this observation on the need for continuing the prohibition 
against interference: 



15 



ployer engaged in conduct which, it may reasonably be said, tends 
to interfere with the free exercise of employee rights under the Act." 
N.L.R.B. V. Ford, 170 F.2d 735, 738 (C.A. 6). Accord: Hendrix 
Mfg. Co. V. N.L.R.B., 321 F.2d 100, 105 (C.A. 5); Melville Confec- 
tions, Inc. V. N.L.R.B., 327 F.2d 689, 692 (C.A. 7), cert, denied, 377 
U.S. 933; Local 542, Operating Engineers v. N.L.R.B., 328 F.2d 850, 
850-852 (C.A. 3)\ N.L.R.B. v. Illinois Tool Works, 153 F.2d 811, 
814 (C.A. 1); N.L.R.B. v. Syracuse Color Press, 209 F.2d 596, 599 
(C.A. 2), cert, denied, 347 U.S. 966. See also N.L.R.B. v. Link-Belt 
Co., 31 1 U.S. S54; N.L.R.B. v. Burnup and Sims, Inc., 379 U.S. 21. 
It is a recognized form of unlawful interference "for an em- 
ployer to . . . induce employees to sign . . . any form of union re- 
pudiating document . . ." N.L.R.B. v. Birmingham Publishing Co., 
262 F.2d 2, 7 (C.A. 5); N.L.R.B. v. V. C. Britton, 352 F.2d 797, 
798-799 (C.A. 9); N.L.R.B. v. Elias Bros., Big Boy Inc., 327 F.2d 
421, 422 (C.A. 6)\ Movie Star, Inc., 145 NLRB 319, 320, enforced, 
361 F.2d 346 (C.A. 5) \ Murray Envelope Corp., 130 NLRB 1574, 
1577-1579; Lakeland Cement Co., 130 NLRB 1365, 1366; F. C 
Huyck & Sons, 125 NLRB 271, 272-273. This is not to say, of 
course, that an employer may not freely communicate its antiunion 
opinions to employees, including those who have already given a 
union their support. Nor does an employer intrude upon protected 
rights where it furnishes minimal assistance to employees who have 



The ban against "interference" has been of central importance 
in protecting the right to organize * * * since it embraces a 
multitude of activities which would not be reached by specific 
prohibitions written into law, and would not be included within 
the range of such narrower concepts as "restraint" or "coercion.' 
84th Cong., Rec, 76th Cong., 1st Sess. (1939) A.2053. 



16 



independently decided to withdraw their support and approach the 
employer for help. E.g., N.L.R.B. v. Brookside Industries, 308 F.2d 
224, 226 (C.A. 4). Here, however, no claim is made that any em- 
ployees had approached the Company to complain of union miscon- 
duct or to ask assistance in recovering their authorization cards. 
Thus, the Board could properly conclude that the Company's sole 
motive for sending employees the revocation cards was to induce 
and assist them to repudiate the Union and that this conduct con- 
stituted interference within the meaning of Section 8(a)(1) of the 
Act. 

Before the Board, the Company argued that its conduct was 
protected by Section 8(c) of the Act. That section, however, pro- 
tects only the "expressing of views, arguments or opinion, "-not in- 
terference with employees' affairs through "solicitation calculated 
to undermine the Union." N.L.R.B. v. Clearfield Cheese Co., Inc., 
213 F.2d 70, 73 (C.A. 3). See also, N.L.R.B. v. Miller, 341 F.2d 
870, 873 (C.A. 2); N.L.R.B. v. Raymond Pearson, 243 F.2d 456, 
457 (C.A. 5); Irving Air Chute Co. v. N.L.R.B., 350 F.2d 176, 180 
(C.A. 2). The Company's letter attacking the integrity of the Union 
was licensed as an expression of opinion, e.g. N.L.R.B. v. TRW-Semi- 
conductors. Inc., 385 F.2d 753 (C.A. 9), but its action in furnishing 
employees an instrument with which to nullify their selection of 
the Union was plainly something more. 



17 



CONCLUSION 

For the reasons stated above, we respectfully submit that a 

decree should issue enforcing the Board's order in full and denying 

the Company's petition for review. 

ARNOLD ORDMAN, 

General Counsel, 

DOMINICK L. MANOLI, 

Associate General Counsel, 

MARCEL MALLET-PREVOST, 

Assistant General Counsel, 

PAUL J. SPIELBERG, 

A ttorney. 



National Labor Relations Board. 



June, 1968. 



CERTIFICATE 

The undersigned certifies that he has examined the provisions 
of Rules 18 and 19 of this Court, and in his opinion the tendered 
brief conforms to all requirements. 



Marcel Mallet-Prevost 
Assistant General Counsel 
National Labor Relations Board 



18 



APPENDIX A 



The relevant provisions of the National Labor Relations 
Act, as amended (61 Stat. 136, 73 Stat. 519, 29 U.S.C, 
Sees. 151, et. seq.), are as follows: 



RIGHTS OF EMPLOYEES 

Sec. 7. Employees shall have the right to self-organiza- 
tion, to form, join, or assist labor organizations, to bargain 
collectively through representatives of their own choosing, 
and to engage in other concerted activities for the purpose 
of collective bargaining or other mutual aid or protection, 
and shall also have the right to refrain from any or all such 
activities except to the extent that such right may be 
affected by an agreement requiring membership in a labor 
organization as a condition of employment as authorized 
in section 8(a)(3). 

UNFAIR LABOR PRACTICES 

Sec. 8. (a) It shall be an unfair labor practice for 
an employer— 

(1) to interfere with, restrain, or coerce employees 
in the exercise of the rights guaranteed in section 7; 

* * * 

(3) by discrimination in regard to hire or tenure of 
employment or any term or condition of employment to 
encourage or discourage membership in any labor organiza- 
tion; 

* * * 



19 



APPENDIX B 



Pursuant to Rule 1 8(f) of the rules of the Court 
GENERAL COUNSEL'S EXHIBITS 
No. Identified Received 



1(a) through 1(1) 


6 


6 


2 and 2(a) 


62 


63 


3 


63 


73 


4 


64 


149 


RESPONDENT'S EXHIBITS 




No. 


Identified 


Received 


I 


177 


178 


2(a) through 2(h) 


203 


204 


2(i) 


245 
JOINT EXHIBITS 


246 


No. 


Identified 


Received 


I 


58 


58 


2 


58 


59 



1 



No. 22811 
IN THE JUL . '^^"^ 

United States Court of Appeals 

FOR THE NINTH CIRCUIT 



The Deutsch Company, Electronic Components 
Division, 

Petitioner, 
vs. 

National Labor Relations Board, 

Respondent. 



On Petition to Review and Set Aside an Order of the 
National Labor Relations Board. 



Brief for the Deutsch Company, Electronic 
Components Division. 



FILED 

Cooper, Tepper & Plant, 

Leon M. Cooper, \ JUM 2 5 I3ti8 

Foster Tepper, | 

Suite 950, Union Bank Building, ^M. B. LUCK. CLERK 

742 South Hill Street, 

Los Angeles, Calif. 90014, 

Attorneys for Petitioner, The Deutsch 
Company, Electronic Components 
Division. 

Parker & Son, Inc., Law Printers, Los Angeles. Phone MA. 6-9171. 



TOPICAL INDEX 

Page 
Jurisdiction 1 

Statement of the Case 2 

I. 
Issues Before the Board 2 

A. Factors Leading to the Deutsch Company's 
Permitting Distribution of Union Litera- 
ture Except in a Specific Area of Its 
Plant 9 

B. Violation of the Deutsch Company's Regu- 
lation 5 

C. Mailing Cards to Employees Which Could 
Be Used to Revoke Union Authorization 
Cards 8 

Argument 9 

I. 

The Deutsch Company Justifiably Regulated the 
Distribution of Union Literature by Its Em- 
ployees Within the Security Area When Such 
Distribution Unduly Interfered With the En- 
forcement of Its Security Program 9 

II. 

The Deutsch Company Reasonably Regulated the 
Right to Distribute Literature When Such Reg- 
ulation Was Justified by the Requirements of 
Its Business, Such Distribution Was Permitted 
in All but One Specific Area of Company 
Property, There Is No Evidence That There 
Were Not Adequate Alternative Means for 
Distribution of Literature and the Evidence Af- 
firmatively Demonstrates That There Were 
Adequate Alternative Means 14 



III. page 

The Deiitsch Company May Lawfully Advise Its 
Employees of Their Rights Under the National 
Labor Relations Act. Including the Manner in 
Which They May Revoke Union Authorization 
Cards Which Were Obtained by Coercion or 
Similar Means, When the Advice Is Given by 
Mailing a Letter to the Employees at Their 
Home so That the Company Cannot Know of 
the Employees' Reaction, the Letter Does Not 
Contain Any Threat or Promise to Induce the 
Employees to Revoke an Authorization Card and 
the Response Cards Are Addressed Directly to 
the Board so That the Company Will Not 
Know What the Employees Do With the Card .. 19 

Conclusion 21 

Appendix A. Relevant Provisions of the National 
Labor Relations Act App. p. 1 

Appendix B. References to Pages of the Steno- 
graphic Transcript. 



TABLE OF AUTHORITIES CITED 

Cases Page 

Adderly v. Florida, 385 U.S. 39 18 

Carolina Mills, Inc., 92 N.L.R.B. 1141 21 

General Electric Co., 163 NLRB No. 31 16 

Korn Industries v. N.L.R.B., 389 F. 2d 117 15, 16 

N.L.R.B. V. Brookside Industries, Inc., 308 F. 2d 
224 20 

N.L.R.B. V. Enid Cooperative Creamery, 169 F. 2d 
986 10 

N.L.R.B. V. Reeves Broadcasting & Development 
Corporation, 336 F. 2d 590 9 

N.L.R.B. V. Rockwell Mfg. Co., 271 F. 2d 109 ..14, 16 

N.L.R.B. V. Sun Co. of San Bern., 215 F 2d 379 .. 20 

N.L.R.B. V. Threads, Inc., 308 F. 2d 1 10 

N.L.R.B. V. Walton Manufacturing Company, 289 
F. 2d 177 9 

Perkins Machine Co., 141 N.L.R.B. 697 20 

Stuart F. Cooper Co., 136 N.L.R.B. 142 9 

Statutes 

National Labor Relations Act, Sec. 8(a)(1) 2 

National Labor Relations Act, Sec. 8(a)(3) 2 

National Labor Relations Act, Sec. 8(c) 19 

Natonal Labor Relations Act, Sec. 10(c) 1 

National Labor Relations Act, Sec. 10(f) 2 

61 Statutes at Large, p. 136 1 

73 Statutes at Large, p. 519 1 

United States Code, Title 29, Sec. 151 1 



No. 22811 
IN THE 

United States Court of Appeals 

FOR THE NINTH CIRCUIT 



The Deutsch Company, Electronic Components 
Division, 

Petitioner, 
vs. 

National Labor Relations Board, 

Respondent. 



On Petition to Review and Set Aside an Order of the 
National Labor Relations Board. 



Brief for the Deutsch Company, Electronic 
Components Division. 



JURISDICTION. 

This case is before the Court upon the petition of 
the Deutsch Company, Electronic Components Division 
(hereinafter called the "Deutsch Company") to review 
and set aside an order of the National Labor Relations 
Board (hereinafter called the "Board") issued against 
the Deutsch Company on May 31, 1967 following 
proceedings under Section 10(c) of the National La- 
bor Relations Act, as amended, (61 Stat. 136, 73 Stat. 
519, 29 U.S.C. Sec. 151, et seq.).^ The Board's de- 
cision and order are reported at 165 N.L.R.B. No. 5. 



^Pertinent provisions of the Act are set forth injra in Ap- 
pendix A. 



— 2— 

This Court has jurisdiction over the proceedings under 
Section 10(f) of the Act, since the alleged unfair labor 
practices occurred at Banning, California, within this 
judicial district, where the Deutsch Company is en- 
gaged in business. The Board has filed a Petition for 
Enforcement with this Court, under case number 22753, 
to enforce the Board's order here in question. 

STATEMENT OF THE CASE. 

I. 
Issues Before the Board, 

The issues before the Board were the lawfulness of 
the Deutsch Company's rule permitting distribution of 
union Hterature on company property, except for a spe- 
cific area, and the lawfulness of the Deutsch Company 
mailing to its employees a card which the employee 
could sign and mail to the Board revoking any union 
authorization cards. The Deutsch Company contended 
that it was lawfully justified in permitting distribution 
of union literature on Deutsch Company property, ex- 
cept for a specific area. The Deutsch Company further 
contended that its mailing of information advising 
employees of their right to withdraw any author- 
ization cards previously signed, is a lawfully protected 
activity. The Board found that the Deutsch Company 
maintained and enforced an unlawfully broad rule pro- 
hibiting solicitation and distribution of literature on 
behalf of a union during non-working time in non- 
work areas of the plant allegedly in violation of Sec- 
tions 8(a)(1) and (3) of the Act. The Board further 
found that the Deutsch Company unlawfully attempted 
to assist employees to revoke their union authorization 
cards allegedly in violation of Section 8(a)(1) of the 
Act. • 



— 3— 

A. Factors Leading to the Deutsch Company's Permitting 
Distribution of Union Literature Except in a Specific 
Area of Its Plant. 

The Deutsch Company is engaged in the production 
and sale of miniature electrical connectors used in the 
aerospace industry [G.C. Exh. 1(e), 1(g), Tr. 186].^ 
In its production process, the Deutsch Company is 
required to plate various products with gold, cadmium, 
silver, platinum and other precious metals. These met- 
als are kept in stock at the plant in quantities having 
great monetary value [Tr. 123, 186]. The building in 
which the plating is performed has an open rail grate 
floor which is used to recover excess plating materials. 
The floor is so constructed that the valuable metals 
are accessible to the employees in the building [Tr. 
124-125]. The Deutsch Company also has an outdoor 
storage area. This area is not enclosed and is used as 
storage space for chemicals, maintenance supplies, 
pipes, tools and other materials and equipment [Tr. 
184]. 

The Deutsch Company organized its present security 
system in 1961 [Tr. 185]. The primary objectives were 
to: (i) maintain in-plant security for the company's 
products, precious metals, supplies and employees, and 
(ii) maintain standards which would not threaten the 
loss of the Deutsch Company's Department of De- 
fense security clearance [Tr. 193-194]. 

As a part of its security program, the Deutsch Com- 
pany designated a portion of its plant as a security 



^Reference abbreviations are as follows : "Tr" : portion of the 
stenographic transcript. "G.C. Exh." : Exhibits of the General 
Counsel. "Resp. Exh.": Exhibits of Respondent. "Jt. Exh.": 
Exhibits jointly offered by General Counsel and Respondent. 
"TXD" : Trial Examiner's Decision. 



area, encompassing generally those areas in which the 
company's valuable metals are stored or used, its un- 
enclosed storage supplies arc maintained and any secret 
or security plans or information are in use or stored. 
The security area is completely enclosed with steel 
fencing, topped with barbed wire. Ingress and egress 
to and from the security area is regulated at all times. 
At gates that are always open, a guard is maintained 
twenty-four hours a day. Where a full time guard 
is not maintained, the gates are padlocked at all times 
when the guards are absent. Access to reception areas is 
similarly regulated [Tr. 178-183]. 

In order to control admission into the security area, 
all persons entering the security area are required to ob- 
tain and wear badges. No one is permitted into the 
securty area unless he has an appropriate badge on his 
person and it is seen by the guard. The badges are 
color coded to distinguish between employees and non- 
employees, and among employees the badges are further 
color coded to indicate the area in which they normally 
work, and in some instances, as mechanics, the type of 
work performed. The badges and color coding system 
enable the security personnel to quickly determine if a 
person can be admitted in to the security area and 
whether he is at a location within the security area in 
which he has reason to be [Tr. 187-190]. 

In addition to the foregoing procedures, the Deutsch 
Company's security program uses personal inspections 
to insure that valuable materials, products or informa- 
tion are not removed from the security area. No one 
can leave the security area with a package unless he 
has written authorization. Briefcases, lunch boxes and 
similar objects must be opened and inspected upon re- 



— 5— 

moval from the security area. Without prior notice, 
periodic searches are made of all persons leaving the 
security area [Tr. 192]. 

The Deutsch Company was initially granted a se- 
curity clearance by the Department of Defense on Feb- 
ruary 27, 1961. It was administratively terminated on 
June 27, 1966. The Department of Defense was re- 
quested by a subcontractor to reactivate the Deutsch 
Company's clearance on July 12, 1966. The clearance 
was reissued on October 26, 1966 [Tr. 12-15]. At 
the time of the hearing of this matter, the Deutsch 
Company was maintaining classified information at its 
plant [Tr. 252-253]. 

Since 1961, the Deutsch Company has had in ef- 
fect and enforced a rule prohibiting all solicitation and 
all distribution of literature on behalf of any organiza- 
tion on company property within the security area and 
generally on all company property. The rule was based 
in large part on the desire to reduce the number of 
people entering and leaving the security area, particu- 
larly with packages and papers, as well as avoiding 
people congregating in areas they would not normally 
have business and avoiding crowd control problems, 
all of which problems would interfere with the enforce- 
ment of the Deutsch Company's security program. The 
rule has been uniformily and non-discriminatorily en- 
forced at all times as against all organizations within 
the security area and generally as to all company prop- 
erty, other than activities by employees of the Deutsch 
Company related to unions [Tr. 196-198]. As to the 
latter activity, the rule has not been enforced against 
union solicitation or distribution activity on Deutsch 
Company property, except that distribution of litera- 



— 6— 

ture on Deutsch Company property is not permitted 
within the security area.^ 

B. Violation of the Deutsch Company's Regulation. 

On June 3, 1966 two Deutsch Company employees 
distributed union authorization cards to employees en- 
tering through the east gate into the security area. 
The two stood inside the security area approximately 
five feet west of the gate entrance, facing each other. 
At times they stood so close together as to make it dif- 
ficult for entering personnel to pass between them, 
causing congestion at the gate entrance. Depending on 
the number of people approaching the gate at one time, 
the resulting congestion made it difficult or impossible 
for the guards to inspect incoming people for appro- 
priate badges [Tr. 211, 216-218, 241, 246]. 

An assistant personnel manager for the Deutsch 
Company advised the two employees that company rules 



^The rule reads : 

"Collections and Gifts : 

The solicitation of funds for any purpose, the sale of tickets 
for all purposes, the operation of lotteries and raffles, and 
the solicitation of membership in organizations during 
working hours on company property are absolutely pro- 
hibited." [Jt. Exh. 2, p. 15]. 
As stated, as applied to union activity, the rule was never en- 
forced as broadly as it appeared on its face. There was no evi- 
dence of any restriction upon discussions within the security area 
or distribution activities on company property outside of the se- 
curity area. The employees understood the true scope of the rule 
as applied to union organizational activity and operated within its 
provisions without proscription by the Deutsch Company [TXD 
7]. Subsequent to the disciplining of employees who violated 
the rule in issue, employees distributed literature on company 
property in accordance with the Deutsch Company's rules on 
more than ten separate occasions without incident [Tr. 77-78, 
89-90]. • 



— 7— 

required them to distribute their Hterature just outside 
of the gate entrance. A large employee parking lot is 
maintained for company employees just outside of the 
gate and the men could distribute their literature to 
employees in the lot as they approached to enter the 
gate [Resp. Exh. 1, Tr. 178-183]. The men refused 
to move outside of the gate and were given warning 
notices [Tr. 176, 201]. 

Thereafter, between June 4, 1966 and July 8, 1966, 
at least five different employees of the Deutsch Com- 
pany distributed union literature outside of the gates 
leading to the security area on more than ten separate 
occasions without restriction by the Deutsch Company 
[Tr. 88-90, 118, 156-157]. Additionally, prior to the 
foregoing incident and any warning about the Deutsch 
Company's rules, union supporters had on many occa- 
sions voluntarily distributed union literature outside of 
the gates leading into the security area [Tr. 130-131]. 

On July 8, 1966, two employees, at different times, 
passed out union authorization cards in a lunchroom lo- 
cated within the security area of the Deutsch Compa- 
ny's plant. Shortly thereafter, they were interviewed at 
the personnel office by a personnel manager who in- 
formed each of them that they had acted in violation of 
the Deutsch Company's rules and each was given a 
discipHnary layoff until the following Wednesday [Tr. 
79-83, 120-122]. 



— 8— 

C. Mailing Cards to Employees Which Could Be Used to 
Revoke Union Authorization Cards. 

About July 14, 1966 the Deutsch Company sent a 
letter to its employees with a postcard enclosed [G.C. 
Exh. 2, 2(a), Tr. 61-63]. The letter said, in part: 

"If you have changed your mind, been mis- 
informed, coerced, intimidated into signing an au- 
thorization card OR if you think someone may 
have sent in a card with your name on it, you can 
revoke that card by mailing the enclosed postcard." 

The card was addressed to the National Labor Re- 
lations Board and stated: 

"Re: Deutsch Electronic Components Division 
Gentlemen : 

Recently I signed a union representation card 
of the United Steelworkers of America because of 
misinformation or duress. 

I hereby revoke my authorization for all pur- 
poses. 

Signature 

Dated " 



— 9— 

ARGUMENT. 
I. 
The Deutsch Company Justifiably Regulated the 
Distribution of Union Literature by Its Em- 
ployees Within the Security Area When Such 
Distribution Unduly Interfered With the En- 
forcement of Its Security Program. 

The Board and the Courts have long recognized 
that an employer may restrict some or all union organi- 
zational activity on all or part of its property when 
such a restriction is justified by the circumstances. 
N.L.R.B. V. Walton Manufacturing Company, 289 F. 
2d 177 (5th Cir. 1961). In determining whether the 
restriction is justified, the facts of the individual case 
must be evaluated, including the basis for the restric- 
tion, the scope of the restriction and whether it has 
been discriminatorily applied. Under circumstances less 
compelling than those here present, the Board and the 
Courts have sustained restrictions much broader in their 
scope than those involved here. 

In N.L.R.B. V. Reeves Broadcasting & Development 
Corporation, 336 F. 2d 590 (4th Cir. 1964) the em- 
ployer enforced a rule prohibiting any discussion re- 
lating to union activity at any time on any part of the 
company's premises. The court held the following facts 
sufficient to justify the imposition of the broad rule 
enforced by the employer: (a) The employer's operation 
of a radio station required split second timing; (b) 
There was a lack of space for any discussion; and (c) 
There was a union hall just across the street at which 
any such activities could be carried on. 

In Stuart F. Cooper Co., 136 N.L.R.B. 142 (1962) 
the employer prohibited union solicitation on any com- 



—10— 

pany property at any time. 136 N.L.R.B. at 148-149. 
The Board held that prohibition justified because there 
had been bickering and an air of hostility created by pro 
and anti-union organizational activity, with some em- 
ployees threatening to quit, notwithstanding the fact 
that the degree of disturbance was far less intense than 
commonly found in such situations. 

In N.L.R.B. V. Enid Cooperative Creamery, 169 F, 
2d 986 (10th Cir. 1948) the Court held that a rule 
forbidding any solicitation on company property at any 
time was justified because the organizational activity 
had apparently resulted in one fight. 

The facts in N.L.R.B. v. Threads, Inc., 308 F. 2d 
1 (4th Cir. 1962) presented a unique reason for the 
imposition of restrictions which in its business jus- 
tification is indistinguishable from the situation in which 
the Deutsch Company found itself. In Threads, the 
employer was engaged in fabric dyeing and its suc- 
cess depended upon maintaining the secrecy of the for- 
mulas that were used in its business. The employer 
engaged in extensive surveillance and inspection of notes 
made by employees in its plant in order to enforce a 
rule forbidding the writing of notes or removing them 
from the plant at any time. The charging party con- 
tended that the rule interfered with his ability to en- 
gage in union activities on company property. The 
Court held that the employer's business operations jus- 
tified the imposition of the rule, surveillance to deter- 
mine if it was being complied with, and inspection of 
notes written by employees to insure that the rule was 
obeyed. 

In applying the foregoing factors to the present case, 
the following facts are significant. The rule as orig- 



—11— 

inally promulgated and thereafter enforced by the 
Deutsch Company, was not discriminatory in intent or 
effect. It applied generally to all activities with equal 
force, except for union activity and as to such ac- 
tivity, it was less broadly enforced. As appHed to union 
activity, the Deutsch Company's rule does not, as the 
Board characterized it, prohibit organizational activity 
at any time on company property. In fact it does not 
prohibit any solicitation with respect to the union on 
company property. Similarly, it does not prohibit dis- 
tribution of union literature on company property, ex- 
cept distribution within the security area. In contrast 
than to the Deutsch Company's long standing, non- 
discriminatory, uniformly enforced rule generally pro- 
hibiting solicitation or distribution of literature on com- 
pany property on behalf of any organization other than 
a union, as to unions, the company permited solicita- 
tion and distribution on company property except within 
the security area. 

There is ample justification for the minimal restric- 
tion contained in the liberalized rule that applied to 
union activity. The Deutsch Company had instituted 
and maintained a security program, which included a 
badging system, to protect its property and to protect 
classified information which it from time to time 
had in its possession. The company used many pre- 
cious metals in its production process and kept sup- 
plies on hand having great monetary value. In addition, 
many materials were stocked in an open storage area to 
which all persons allowed within the security area had 
access. Classified information was stored at the plant 
both prior and subsequent to the time in question. The 
Deutsch Company maintained essentially the same se- 



—12— 

curity program in force at all times since the necessity 
to protect its own property was always present and it 
was easier to maintain a set pattern than to periodical- 
ly re-educate its employees as to the security proce- 
dures to be followed from time to time. 

Distribution of union literature just inside the gates 
leading into the security area was causing congestion at 
the gates as people backed up because their entrance 
into the security area was being slowed as they were 
forced to pass single file past the persons engaged in 
distribution. The jamming resulted in making it dif- 
ficult and occasionally impossible for the guards to de- 
termine if the people entering into the security area 
were authorized to be there. If the Deutsch Company's 
rules were not then enforced, the same difficulty in 
maintaining security at the gates could be anticipated 
as employees left at the end of their shifts. 

Other physical circumstances of the plant and the 
operation of the security program contributed to the 
necessity for a prohibition against distribution within 
the security area. As previously indicated, many of the 
company's products and the materials used in the man- 
ufacturing process were of a small physical dimension, 
but of substantial monetary value. As a part of the 
company's procedures, anyone seeking to leave the se- 
curity area was subject, at random times, to personal 
inspection. In addition, all packages, briefcases and 
other containers were always required to be inspected 
prior to being taken out of the security area. Mainte- 
nance of the security program would be inherently dis- 
rupted by people bringing in and removing packages 
from the security area and having papers passing 
from person to person in various parts of the plant. 



—13— 

Inspection of people and packages would uncover pos- 
session of literature, including authorization cards. The 
union and the concerned employees would not want 
this information to come to the attention of the Deutsch 
Company. Similarly, the Deutsch Company would not 
want to be the recipient of this information, even 
though uncovered by chance, since, among other prob- 
lems thereby created, the union might attempt to bring 
unfounded unfair labor practice charges. Such dis- 
tribution would also tend to attract employees to places 
in the security area that they would normally not be 
present at, making more difficult control over the parts 
of the security area a j)erson was permitted to be in. 

All of the foregoing actual and potential problems 
were the very ones envisioned by the company in pro- 
mulgating the original rule and in applying the more 
liberal interpretation to union activity. In order to al- 
leviate the existing and potential serious impairments 
to its security program, the Deutsch Company request- 
ed the persons engaged in distribution to make a mi- 
nuscule change in their procedure. That is, distribute 
their literature on company property just outside of 
the gates leading into the security area. While not en- 
tirely accommodating the requirements for enforcement 
of the Deutsch Company's security program, the liber- 
al rule enforced by the Deutsch Company represents 
the best solution under the circumstances and should 
be held to be lawfully justified. 



—14— 

II. 
The Deutsch Company Reasonably Regulated the 
Right to Distribute Literature When Such 
Regulation Was Justified by the Requirements 
of Its Business, Such Distribution Was Per- 
mitted on All but One Specific Area of Com- 
pany Property, There Is No Evidence That 
There Were Not Adequate Alternative Means 
for Distribution of Literature and the Evidence 
Affirmatively Demonstrates That There Were 
Adequate Alternative Means. 

The Deutsch Company submits that its regulation 
of distribution activities by the union on a part of its 
property is valid and proper in view of the abundant 
evidence of justification for the rule, as discussed 
hereinabove. However, a number of court decisions 
have indicated that in determining the lawfulness of a 
restriction of organizational activity on company prop- 
erty, the court should not work in a void by looking 
solely to the justification for the regulation. Rather, 
realizing that the issue basically involves a weighing 
of the competing interests of the property owner to reg- 
ulate the use of his property and the employees to have 
reasonable opportunities to engage in organizational ac- 
tivities, these courts have held that the scope of the 
regulation and its effect on opportunities for organiza- 
tional activity must be assessed as well as the justifica- 
tion for the regulation. 

In N.L.R.B. V. Rockzvell Mfg. Co., 271 F. 2d 109 
(3rd Cir. 1959) the employer's plant was located in an 
urban area, having highways and broad sidewalks on 



—15— 

two sides. Parking lots were available to employees im- 
mediately adjacent to entrances to the plant. Original- 
ly, union literature was distributed on the sidewalks as 
employees entered the parking lot. Subsequently, em- 
ployees requested to be allowed to distribute such liter- 
ature on the parking lots. The company refused this 
request and an unfair labor practice charge was filed 
by the union. The Court held that the Board failed to 
consider the fact that there might be alternative means 
of communication available, pointed out the various pos- 
sibilities existing under the facts, and denied enforce- 
ment. 

In Korn Industries v. N.L.R.B., 389 F. 2d 117 
(4th Cir. 1967) the employer prohibited distribution 
of literature on behalf of any organization on company 
property. The employer interpreted this rule less broad- 
ly as to union literature distributed by its employees and 
permitted distribution in the parking lot area of the 
company's premises and the posting of such litera- 
ture on a union bulletin board. The company justified 
the rule as being necessary to prevent fire hazards. An 
employee was discharged for violating the rule by dis- 
tributing literature in a doorway in a non-working area 
of the plant. The Court refused to enforce the Board's 
finding that the rule was unlawful. The Court pointed 
out that the issue of the presence of satisfactory al- 
ternative means of distribution was not presented since 
the company did not prohibit all distribution on com- 
pany property. The Court further stated that the scope 
of the company rule and its effect on organizational 



—16— 

activity, as well as the justification for the rule, must 
be considered together. So considered, the court held 
that the rule was valid in view of the minimal nature 
of the restriction, the alternative means for distribution 
available both on and off company property and the 
justification for the restriction. 

The Board itself has succinctly stated the spirit re- 
flected by the foregoing decisions in General Electric 
Co., 163 NLRB No. 31 where the issue was the pro- 
priety of the company forbidding the solicitation of 
funds on company property to aid another local. The 
Board stated : 

"In striking a balance, as we must, between the 
Respondent's right to control its own property and 
the competing right of employees guaranteed in 
Section 7, we are not prepared to say that the 
union's interest in using Respondent's premises to 
collect support money in behalf of striking em- 
ployees at another plant and in another bargaining 
unit so outweighs the Respondent's interest in con- 
trolling its property as to render unlawful in the 
specific circumstances of this case Respondent's 
application of the rule herein involved." 

The combined factors present in Koni Industries and 
Rockwell are present here. The Deutsch Company's 
regulation was non-discriminatory, granted union ad- 
herents far greater rights than any other group and 
permitted substantial union activity on company prop- 
erty, restricting only distribution activities and per- 
mitting even that activity on all but a part of company 



—17-^ 

property. Further, sufficient alternative means of dis- 
tribution are readily available, both on and off com- 
pany property. The Deutsch Company plant is sur- 
rounded on three sides by public sidewalks, where dis- 
tribution activity could be carried on. The main park- 
ing lot was adjacent to the plant and all employees en- 
tering on this lot would normally enter the security 
area from the east or north gate. The employees were 
allowed to use the parking lot and could engage in their 
activities from just outside these gates, as employees 
passed into and out of the gates, as effectively as they 
could inside the security area. The other gate leading in- 
to the security area was adjacent to the Banning Air- 
port. While fewer employees used this gate, the side- 
walk and airport property adjacent to this gate was 
accessible to employees for their purposes. As in Rock- 
well, the union here initially voluntarily engaged in 
distribution activity in areas permitted by the regula- 
tion. There was no evidence that these areas were un- 
satisfactory or disabled the carrying on of such ac- 
tivity. After the rule was enforced, employees again 
used these available areas on and off company prop- 
erty, as a base for distribution of literature. While 
ample opportunity was presented, no one indicated that 
any of these areas were even less than satisfactory 
for such purposes. In addition to the foregoing facts, 
there was no evidence presented demonstrating any in- 
ability to adequately and effectively conduct desired or- 
ganizational w^ork by mail, at public meetings, by per- 
sonal contact after work and in private homes. 



—18— 

When the justification for the regulation, its min- 
imal effect on organizational activity, the large area of 
activity still permitted and the alternative methods for 
distribution available are all considered, the Deutsch 
Company's regulation is a lawful regulation which is 
consistent with and does not unduly infringe on the 
Deutsch Company's right to conduct its business and 
its employees' rights to engage in organizational activi- 
ty. Such a determination reflects the balancing of com- 
peting interests approved by the Supreme Court in 
Adderly v. Florida, 385 U.S. 39 (1966). There the 
Court, weighing the competing values of free speech 
and assembly on the one hand, and the right of the 
owner of property to regulate the use of his property, 
ruled that the latter interest must prevail. The Court 
pointed out that an owner of property has a right to 
preserve the property he owns for the use to which it 
is lawfully dedicated. The appellants contended that 
they had a right to go upon the property because they 
were going there to exercise their right to free speech 
and assembly. The Court "vigorously and forthrightly 
rejected" that argument stating: 

"Such an argument has as its major unarticulated 
premise the assumption that people who want to 
propagandize or protest have a constitutional right 
to do so whenever and however and wherever they 
please." 385 U.S. at 47-48. 



—19— 

III. 
The Deutsch Company May Lawfully Advise Its 
Employees of Their Rights Under the National 
Labor Relations Act, Including the Manner in 
Which They May Revoke Union Authorization 
Cards Which Were Obtained by Coercion or 
Similar Means, When the Advice Is Given by 
Mailing a Letter to the Employees at Their 
Home so That the Company Cannot Know of 
the Employees' Reaction, the Letter Does Not 
Contain Any Threat or Promise to Induce the 
Employees to Revoke an Authorization Card 
and the Response Cards Are Addressed Directly 
to the Board so That the Company Will Not 
Know What the Employees Do With the Card. 

An employer, under the "free speech" provision of 
section 8(c) of the Act, has the right to advise its 
employees of the way that they can indicate their re- 
jection or repudiation of a union and its employees 
have a right to receive this information, notwithstand- 
ing the objections of a union. The sole restriction is 
that the communication must not contain any threats 
or coercion. Here the letter mailed by the Deutsch 
Company to its employees merely advised the employees 
that they need not sign a card, that if they did sign 
one, in view of the disadvantages of a union and the 
use a union could make of a card and the circum- 
stances under which some cards had been obtained, they 
could revoke it in a designated manner. The card en- 
closed with the letter was addressed directty to the 
Board so that the Deutsch Company would not be ad- 
vised of the employee's decision. 

In each case where the employer has been found to 
have committed an unfair labor practice in connection 



—20— 

with revocation of authorization cards, there has been 
the use of threats or force to obtain revocation or 
the discussion of whether to revoke the card occurred 
under circumstances where the employee's decision would 
be communicated to the employer, thereby applying 
indirect pressure to the employees' freedom of choice, 
The Board found that none of these factors were pre- 
sented here [TXD 12]. 

In each case where the foregoing factors have not 
been present and all that the employer did was to ad- 
vise its employees of the law and make available to 
them, in a non-coercive manner, the means to revoke 
authorization cards if they so desired, the Board and 
the courts have held the employer's action to be pro- 
tected activity. 

In Perkins Machine Co., 141 N.L.R.B. 697 (1963) 
the employer sent a letter to each of its employees ad- 
vising them of the procedure by which they could re- 
voke their authorization cards. The Board said that 
the right to give this information was protected and 
since there was no coercion in the letter or the sur- 
rounding circumstances, there was no basis to object 
to the employer's conduct. 

Similarly, in N.L.R.B. v. Brooksidc Industries, Inc., 
308 F. 2d 224 (4th Cir. 1962) the employer's person- 
nel director advised some employees how to revoke their 
authorization cards. The Court ruled that there had 
been no unlawful threats or promises, merely an ex- 
planation of the employees' rights, and that such ac- 
tivity was protected. 

A related factual situation was presented in N.L.R.B. 
V. Sun Co. of San Bern., 215 F. 2d 379 (9th Cir. 



—21— 

1954). The employer advised its employees "that those 
employees who had signed ITU authorization cards 
could cancel such authorization cards by merely writing 
the ITU or its representative requesting that such au- 
thorizations be cancelled" (See 103 N.L.R.B. 359 at 
369). The Court held that such statements were pro- 
tected. 

In CaroUnu Mills, Inc., 92 N.L.R.B. 1141 (1951) 
the Board held protected the employer's statement that 
'T hear some of the hands are signing with the 
union. I don't know whether you are or not, but 
I advise the best thing to do if you have is to 
tear up your slip and tell them you don't want any 
part of the union." 

In view of the clear statutory favor given to the 
employees' right to hear, unrestricted, all sides on the 
issue of organizational activity, the Deutsch Company 
should be protected in expressing its position with 
regard to joining a union and in advising its employees 
of the action they can take if they agree with the com- 
pany's point of view. 

Conclusion. 

For the reasons stated, it is respectfully submitted 
that the petition to review and set aside the Board's 
order should be granted. 

Cooper, Tepper & Plant, 

Leon M. Cooper, 

Foster Tepper, 
Attorneys for Petitioner, The Deutsch 
Company, Electronic Components Di- 
vision. 



Certificate, 

I certify that, in connection with the preparation of 
this brief, I have examined Rules 18, 19 and 39 of the 
United States Court of Appeals for the Ninth Circuit, 
and that, in my opinion, the foregoing brief is in full 
compliance with those rules. 

Foster Tepper 



I 



I 



I 



APPENDIX A. 

The relevant provisions of the National Labor Re- 
lations Act, as amended (61 Stat. 136, 72i Stat. 519, 
29 U.S.C, Sec. 151, et seq.) are as follows: 

RIGHTS OF EMPLOYEES 

SEC. 7. Employees shall have the right to self- 
organization, to form, join, or assist labor organi- 
zations, to bargain collectively through representa- 
tives of their own choosing, and to engage in other 
concerted activities for the purpose of collective 
bargaining or other mutual aid or protection, 
and shall also have the right to refrain from any 
or all of such activities except to the extent that 
such right may be affected by an agreement re- 
quiring membership in a labor organization as a 
condition of employment as authorized in section 
8(a)(3). 

UNFAIR LABOR PRACTICES 

Sec. 8(a) It shall be an unfair labor practice 
for an employer 

(1) to interfere with, restrain, or coerce em- 
ployees in the exercise of the rights guar- 
anteed in Section 7; 

(3) by discrimination in regard to hire or ten- 
ure of employment or any term or condi- 
tion of employment to encourage or dis- 
courage membership in any labor organi- 
zation. . . . 



— 2— 

Sec. 8(c) The expressing of any views, argu- 
ment or opinion, or the dissemination thereof, 
whether in written, printed, graphic or visual 
form, shall not constitute or be evidence of an 
unfair labor practice under any of the provisions 
of this Act, if such expression contains no threat 
of reprisal or force or promise of benefit. 

PREVENTION OF UNFAIR LABOR 
PRACTICES 

Sec. 10(a) The Board is empowered, as herein- 
after provided, to prevent any person from en- 
gaging in any unfair labor practice (listed in sec- 
tion 8) affecting commerce. This power shall not 
be affected by any other means of adjustment or 
prevention that has been or may be established by 
agreement, law, or otherwise : * * * 

* * * * 

(c) * * * jf upon the preponderance of the tes- 
timony taken the Board shall be of the opinion 
that any person named in the complaint has en- 
gaged in or is engaging in any such unfair labor 
practice, then the Board shall state its findings 
of fact and shall issue and cause to be served on 
such person an order requiring such person to 
cease and desist from such unfair labor practice 
and to take such affirmative action including re- 
instatement of employees with or without back 
pay, as will effectuate the policies of this Act : * ** 

* * * * 

(f) Any person aggrieved by a final order of 
the Board granting or denying in whole or in 
part the relief sought may obtain a review of such 



— 3— 

order in any circuit court of appeals of the United 
States in the circuit wherein the unfair labor prac- 
tice in question was alleged to have been engaged 
in or wherein such person resides or transacts busi- 
ness, or in the United States Court of Appeals 
for the District of Columbia, by filing in such 
court a written petition praying that the order of 
the Board be modified or set aside. A copy of 
such petition shall be forthwith transmitted by the 
clerk of the court to the Board, and thereupon 
the aggrieved party shall file in the court the rec- 
ord in the proceeding, certified by the Board, as 
provided in section 2112 of title 28, United States 
Code. Upon the filing of such petition, the court 
shall proceed in the same manner as in the case 
of an application by the Board under subsection 
(e) of this section, and shall have the same ju- 
risdiction to grant to the Board such temporary re- 
Hef or restraining order as it deems just and 
proper, and in like manner to make and enter 
a decree enforcing, modifying, and enforcing as 
so modified, or setting aside in whole or in part 
the order of the Board; the findings of the Board 
with respect to questions of fact if supported by 
substantial evidence on the record considered as a 
whole shall in like manner be conclusive. 



APPENDIX B. 

This appendix is prepared pursuant to Rule 18(f) of the Rules of 
the Court. References are to pages of the stenographic transcript. 



No. 



Identified 



Received 



0, Kg)- 
ind 2(a)- 



General Counsel's exhibits 



6 
62 



6 

63 



Respondent's exhibits 







i 



i 



Nos. 22,753 and 22,811 
IN THE 



United States Court of Appeals 

FOR THE NINTH CIRCUIT 



National Labor Relations Board, 

Petitioner, 
vs. 

The Deutsch Company, Electronic Components 
Division, 

Respondent. 



On Petition for Enforcement and on Petition to Review and 
Set Aside an Order of the National Labor Relations 
Board. 



Reply Brief for the Deutsch Company, Electronic 
Components Division. 



Cooper, Tepper & Plant, FILED 

Leon M. Cooper, 

Foster Tepper, SEP 9 1968 

742 South Hill Street, 

Suite 950, WM. B. LUCK, CLERK 

Los Angeles, Calif. 90014, 

(213) 627-2147, 

Attorneys for The Deutsch Company, 
Electronic Components Division. 

Parker & Son, Inc., Law Printers, Los Angeles. Phone MA. 6-917L 



TOPICAL INDEX 

Page 
Argument 1 

I. 

Substantial Evidence on the Record as a Whole 
Shows That the Deutsch Company Lawfully- 
Regulated Distribution of Union Literature 
With the Minimal Restraint Required by the 
Circumstances 1 

A. Scope of Activities Regulated 2 

B. Territorial Scope of Regulation 3 

C. Justification for Limited Regulation in Fact 
Exercised 3 

D. The Board Failed to Apply the Appropriate 
Legal Standards to Determine the Lawful- 
ness of the Deutsch Company's Limited 
Regulation 4 

IL 

The Deutsch Company Lawfully Advised Its Em- 
ployees of Their Right to and the Method by 
Which They Could Terminate Any Authoriza- 
tion Card Outstanding in Their Name 8 

Conclusion 14 



TABLE OF AUTHORITIES CITED 

Cases Page 

F. C. Huych & Sons, 125 NLRB 271 12 

Hendrix Mfg. Co. v. NLRB, 321 F. 2d 100 10 

Korn Industries v. NLRB, 389 F. 2d 117 5 

Lakeland Cement Co., 130 NLRB 1365 12 

Melville Confections, Inc. v. NLRB, 327 F. 2d 689 .. 10 

Murray Envelope Corp., 130 NLRB 1574 12 

NLRB V. Birmingham Publishing Co., 262 F. 2d 2 .. 11 

NLRB V. Burnup and Sims, Inc., 379 U.S. 21 11 

NLRB V. Elias Bros. Big Boy, Inc., 327 F. 2d 421 .. 12 

NLRB V. Ford Bros., 170 F. 2d 735 9 

NLRB V. IlHnois Tool Works, 153 F. 2d 811 10 

NLRB V. Link-Belt Co., 311 U.S. 584 9 

NLRB V. Movie Star, Inc., 361 F. 2d 346 12 

NLRB V. Rockwell Mfg. Co., 271 F. 2d 109 7 

NLRB V. Syracuse Color Press, 209 F. 2d 596 ..10, 13 

NLRB V. V. C. Britton, 352 F. 2d 797 11 

Operating Engineers v. NLRB, 328 F. 2d 850 10 

Republic Aviation Corporation v. National Labor 

Relations Board, 324 U.S. 793 5 

Southwire Co. v. NLRB, 383 F. 2d 235 13 

Statutes 

National Labor Relations Act, Sec. 8(a)(1) 

9, 11, 12, 13 

National Labor Relations Act, Sec. 8(b)(1) 10 

National Labor Relations Act, Sec. 8(c) 8, 13 

National Labor Relations Act, Sec. 10(b) 2 



Nos. 22,753 and 22,811 
IN THE 



United States Court of Appeals 

FOR THE NINTH CIRCUIT 



National Labor Relations Board, 

Petitioner, 
vs. 

The Deutsch Company, Electronic Components 
Division, 

Respondent. 



On Petition for Enforcement and on Petition to Review and 
Set Aside an Order of the National Labor Relations 
Board. 



Reply Brief for the Deutsch Company, Electronic 
Components Division. 



ARGUMENT. 

I. 
Substantial Evidence on the Record as a Whole 
Shows That the Deutsch Company Lawfully 
Regulated Distribution of Union Literature 
With the Minimal Restraint Required by the 
Circumstances. 

The Board argues that there is substantial evidence 
to support its finding that the Deutsch Company unlaw- 
fully prohibited solicitation or distribution on behalf of 
the union anywhere on the plant premises at any time. 



— 2— 

without justification. However, the Board's finding as 
to the scope of the Deutsch Company's regulation, both 
as to the area of the Deutsch Company's plant and the 
organizational activities covered, as well as the Board's 
finding as to the alleged lack of justification for the 
regulation, is without support of substantial evidence 
on the record as a whole. Additionally, the Board 
failed to apply the appropriate legal standards to de- 
termine the lawfulness of the limited regulation in fact 
carried out by the Deutsch Company. 

A. Scope of Activities Regulated. 

The Deutsch Company did not regulate any organiza- 
tional activity other than distribution of literature. 
There was no regulation of discussions or any other 
organizational activities engaged in on behalf of the 
union during non-working time. The rule published in 
the Deutsch Company's Welcome Manual was in its 
apparent scope broader than the regulation in fact ex- 
ercised over union organizational activity. Because of 
the ostensible scope of the published rule, the Board's 
Complaint alleged that the Deutsch Company had pro- 
mulgated an unlawfully broad "no solicitation" rule. 
However, the Deutsch Company's objection that any 
claim of an unfair labor practice based upon the mere 
promulgation of the published rule was barred by the 
six month limitation period of Section 10(b) of the 
Act was recognized and the allegation stricken from 
the Complaint [Tr. 6, 58-59]. There is no evidence 
that subsequent to the date of promulgation of the pub- 
lished rule, the Deutsch Company ever enforced the 
published rule, or any other rule as to union organiza- 
tional activity, other than to regulate distribution of 
literature within the security area. 



— 3— 

B. Territorial Scope of Regulation. 

The limited regulation in fact exercised by the 
Deutsch Company over distribution of literature did 
not apply to all company owned property; only 
company property within the security area was affected. 
Employees were free to, and did engage in distribution 
activities at entrances to company property and on com- 
pany property at entrances to the security area. While 
at one period of time some employees were erroneously 
cautioned about distribution activities in these per- 
mitted areas, such errors were quickly corrected by man- 
agement and no employee suffered any discrimination 
by reason of such activities. The Board expressly 
found that such regulation as was exercised, was ap- 
plicable only to activity in the security area and that 
the Deutsch Company's employees understood the true 
territorial scope of such regulation [TXD 7]. 

C. Justification for the Limited Regulation in Fact 

Exercised. 

The Board refers to a few specific examples of dif- 
ficulties the Deutsch Company contends would exist if 
it were not permitted to continue the limited regulation 
exercised by it, and concludes that they are insuf- 
ficient to justify the regulation. However, the Board 
has failed to consider the full extent of the problem pre- 
sented to the Deutsch Company if the proposed or- 
ganizational activity is allowed in the security area. The 
Deutsch Company enforces security standards to main- 
tain the secrecy of its product development, prevent 
theft, safeguard its classified materials and to protect 
its property and employees. The problems created by 
the proposed organizational activity arise because dis- 
tribution of union literature within the security area is 



— 4— 

fundamentally incompatible with the Deutsch Com- 
pany's maintenance of its required standards of security. 
It is impossible for the Deutsch Company to maintain 
its security control when numbers of people bring into 
the security area and distribute large amounts of ma- 
terials, with the crowding, congestion and disruption in 
routine, orderly company procedures which must in- 
evitably accompany such activities. Congestion at the 
gates, difficulty in seeing if appropriate badges are pos- 
sessed, mingling in areas where people normally do not 
belong, increased problems in controlling materials being 
brought into and leaving the security area and problems 
arising from applying normal security procedures to peo- 
ple possessing union materials are not all, but only some 
of the problems the Deutsch Company seeks to avoid 
by its regulation of union distribution activities in the 
security area. Because of the fundamental conflict be- 
tween the proposed organizational activity and main- 
tenance of the desired level of security in the security 
area, the Deutsch Company enforced the regulation in 
issue in the security area. Because of this irreconcil- 
able conflict, the Board erred in finding that the 
Deutsch Company's regulation was not justified, even 
without consideration of the limited scope of regula- 
tion and the alternative means to carry on distribution 
activities available to the union, hereinafter argued. 

D. The Board Failed to Apply the Appropriate Legal 
Standards to Determine the Lawfulness of the Deutsch 
Company's Limited Regulation. 

The Board argues that the regulation exercised by 
the Deutsch Company is invalid because it prohibited 
organizational activity on company property during 
non-working time. But as shown, the Deutsch Com- 



— 5— 

pany did not regulate anything other than one limited 
form of organizational activity, distribution of litera- 
ture, and that only on a designated part of company 
property. The Board's erroneous finding as to the ex- 
tent of the regulation resulted in the Board failing to 
consider the fact that the Deutsch Company's regula- 
tion was greatly limited in scope, in determining 
whether circumstances existed to justify the Deutsch 
Company in exercising its limited regulation. 

Where regulation of distribution activities is limited 
in scope, less compelling circumstances need be estab- 
lished to justify such regulation than would be neces- 
sary to vaHdate a total proscription of organizational 
activity on company property. Korn Industries v. 
NLRB, 389 F. 2d 117 (4th Cir. 1967). In Korn Indus- 
tries the court recognized that in regulating the compet- 
ing desires of the employer to control the uses to be 
made of its property and of the employee to be free to 
engage in organizational activities, there must be a 
weighing of the competing interests. There, the court 
held that since the employer's regulation only affected 
a part of its property and alternative means of carrying 
on organizational activity were available, the employer's 
regulation, growing out of a desire to protect its prop- 
erty, would be recognized. 

The approach of weighing the reasons for the regula- 
tion against its effect on organizational activity has 
long been recognized by the courts. Thus in Republic 
Aviation Corporation v. National Labor Relations 
Board, 324 U.S. 793, which established the presumptive 
invalidity of a total ban of organizational activities on 
company property, the court stated that the issue in- 
volved "working out an adjustment between the undis- 



putcd right of self-organization assured to employees 
under the Wagner Act and the equally undisputed right 
of employers to maintain discipline in their establish- 
ments." 324 U.S. at 797-798. As the court stated, 
"Like so many others, these rights are not unlimited 
in the sense that they can be exercised without regard 
to any duty which the existence of rights in others 
may place upon employer or employee. Opportunity to 
organize and proper discipHne are both essential ele- 
ments in a balanced society." 324 U.S. at 798. 

Since resolution of the issue of whether the right 
to engage in organizational activity on company prop- 
erty should exist at all involved weighing of the com- 
peting interests of the employer and employee, it seems 
only fair and logical that in resolving conflicts be- 
tween these interests in a particular situation, it is im- 
plicitly necessary to weigh on the one hand, the degree 
to which the employer's operations require it to enforce 
certain regulations with regard to the use of its prop- 
erty and, on the other hand, the effect of any such 
regulation on the exercise of the employee's organiza- 
tional rights. And when the necessity for the Deutsch 
Company's regulation and its limited scope are weighed 
against its negligible effect on union organizational 
activities, the regulation should be found to be justified. 

In addition to not considering the fact that the 
Deutsch Company's regulation was limited in scope, 
the Board refused to take into account the presence of 
adequate alternative means of distribution in deter- 
mining if the Deutsch Company's regulation was 
justified. As the Board points out, the circuits have 
differed on whether the General Counsel must establish 
a lack of alternative means of carrying on organization- 



al activity as a part of its case that the employer's regu- 
lation is invalid. Since, as pointed out above, the de- 
velopment and application of the rules relating to the 
use of an employer's property for organizational activity 
involved weighing the competing interests of the em- 
ployer and employees, the proper rule is, as NLRB v. 
Rockwell Mfg. Co., 271 F. 2d 109 holds, that the pres- 
ence or absence of satisfactory alternative means of 
communication must be considered in first determininsf 
whether the employer's regulation is justified under all 
of the circumstances of the case. 

Some of the circuits have merely ruled that the Gen- 
eral Counsel need not show the presence or absence of 
such other means of distribution as a part of establish- 
ing his case. But here, the Deutsch Company has af- 
firmatively established the presence of adequate alter- 
native means for distribution. Not only was it shown 
that such means existed and could be exercised on com- 
pany property, but it was proven that union organizers 
had voluntarily and successfully used these means 
both prior to the Deutsch Company's enforcement of 
its regulation and, without hindrance or evidence of any 
diminished effectiveness, after the Deutsch Company 
enforced its regulation. Nevertheless, the Board re- 
fused to consider the evidence of such alternatives in 
determining whether the Deutsch Company's minimal 
regulation was valid. 

In view of the fact that only one type of organiza- 
tional activity was regulated at all, and that only on a 
part of the Deutsch Company's property, and the fur- 
ther fact that satisfactory alternative means for distri- 
bution are available, when the nominal infringement on 
organizational activity resulting from the Deutsch Com- 



pany's regulation is weighed against the logical and 
imperative business necessity for such regulation, the 
regulation must be held to be justified and valid under 
all of the circumstances. 

II. 
The Deutsch Company Lav^fully Advised Its Em- 
ployees of Their Right to and the Method by 
Which They Could Terminate Any Authoriza- 
tion Card Outstanding in Their Name. 

The Deutsch Company mailed a letter to its em- 
ployees which advised them that the Deutsch Company 
had learned that some employees had been tricked or 
deceived into signing authorization cards. The letter 
then informed them that if they had executed a card 
for either of the foregoing reasons they could revoke 
the card. Incidental to sending the letter, and as a 
part of informing its employees of the way in 
which they could revoke their authorization card in 
the event any of the foregoing circumstances existed, 
the Deutsch Company enclosed a post card with the 
letter. The post card was addressed to the Board's re- 
gional office and simply stated the senders desire to 
revoke his outstanding authorization card. The Board 
properly concluded that the letter was an expression 
of opinion protected by Section 8(c) of the Act. Since 
the post card was mailed with the letter and was merely 
an incidental means of assisting the Deutsch Company 
in expressing its position, the mailing of the card should 
be entitled to the same protection as the sending of the 
letter. 

Even in the position it takes, the Board acknowledges 
that the post cards did not restrain or coerce the Deutsch 
Company's employees within the meaning of Section 



— 9— 

8(a)(1) of the Act. However, the Board concludes 
that the cards do interfere with the Deutsch Company's 
employee's rights within the meaning of the Act. 

No categorical definition of what is interference 
within the meaning of Section 8(a)(1) can be made. 
But an examination of the cases reUed upon by the 
Board clearly indicates the kind of conduct intended to 
be proscribed. 

In NLRB V. Link-Belt Co., 311 U.S. 584 the Su- 
preme Court stated that there was interference within 
the meaning of the Act when there was : "the existence 
of conditions or circumstances which the employer 
created or for which he was fairly responsible and as a 
result of which it may reasonably be inferred that 
the employees did not have that complete and unfettered 
freedom of choice which the Act contemplates." 311 
U.S. at 588. In Link-Belt the court found that there 
was interference by the employer because of its favorit- 
ism and assistance to one of the two competing unions 
seeking to organize the company's employees. 

In its brief the Board states that interference exists 
when: "the employer engaged in conduct which, it may 
reasonably be said, tends to interfere with the free 
exercise of employee rights under the Act." 

The facts in the cases cited by the Board fill out 
these definitions of interference. 

In NLRB V. Ford Bros., 170 F. 2d 735 the court 
sustained findings of interference and coercion because 
of the employer's discharge of a known union adher- 
ent, allegedly for violation of a rule never previously 
announced or enforced, as well as because of threats 
of discrimination against union members, attempts to 



—10— 

deal individually with employees and threats to dis- 
charge union adherents. 

Similarly in Hendrix Mfg. Co. v. NLRB, 321 F. 2d 
100 supervisors warned employees that if the union 
were to win, bonuses, pensions and holiday pay would 
be curtailed and as a part of these acts, urged employees 
to solicit anti-union votes from other employees. 

And in Melville Confections, Inc. v. NLRB, 327 F. 
2d 689 a finding of interference, coercion and restraint 
was sustained because the employer conditioned the 
right to membership in its profit sharing plan to non- 
membership in a union. 

In Local 542, Operating Engineers v. NLRB, 328 
F. 2d 850 the union was found to have violated Sec- 
tion 8(b)(1) by threatening bodily injury and damage 
to property in an attempt to gain support of other em- 
ployees during a strike. 

Also in NLRB v. Illinois Tool Works, 153 F. 2d 
811 the court supported the Board's finding of inter- 
ference, restraint and coercion growing out of the em- 
ployer's questioning its employees about the extent of 
their and other employees' union activity, refusing to 
deal with representatives of the employees, and enforcing 
an unlawfully broad, unjustified rule against solicitation 
on company property. 

In NLRB V. Syracuse Color Press, 209 F. 2d 596 
the court refused to sustain the Board's finding of inter- 
ference, restraint and coercion arising solely out of the 
employer's interrogating its employees as to the scope of 
their union activity. Instead, the Board's order was sus- 
tained because the court found that in fact, the inter- 
rogation was carried out in a coercive atmosphere. 



—11— 

Finally, in NLRB v. Biirnup and Sims, Inc., 379 U.S. 
21 the Court held that Section 8(a)(1) is violated by 
an employer's good faith discharge of an employee for 
alleged misconduct arising out of a protected activity, 
when the misconduct in fact never occurred. The Court 
stated that a contrary ruling would result in the loss of 
immunity for protected activity. 

In each of the foregoing cases, although many did not 
rest their decision solely on "interference", there was in- 
herent in the conduct held unlawful, some actual or po- 
tential threat of preventing employees from exercising 
their own free choice of representatives. Thus, in the 
context of employer action advising employees of their 
right to revoke their authorization cards, there must be 
something in the employer's conduct which at least 
threatens to deny the employee his free choice, before the 
employer's conduct can be found to be interference with- 
in the meaning of Section 8(a) (1) of the Act. The au- 
thorities cited by the Board relating to employer action 
to encourage their employees to withdraw from the 
miion support this position. 

In NLRB V. Birmingham Publishing Co., 262 F. 2d 
2 the employer's attempt to have its employees with- 
draw from a union was held unlawful because a super- 
visor personally passed around a decertification petition 
and promised salary raises and other benefits to em- 
ployees who signed the petition. 

Similarly in NLRB v. V. C. Britton, 352 F. 2d 797 
the court held unlawful the company's attempt to en- 
courage its employees to sign a petition to repudiate the 
union, because, among other things, the employees were 
told the company would close down and discharge its em- 
ployees if the union won. 



—12— 

In NLRB V. Elias Bros. Big Boy, Inc., 327 F. 2d 
421 the employer interrogated employees with regard 
to the extent of their union activities and personally at- 
tempted to get them to sign letters withdrawing from 
the union. 

Finally in NLRB v. Movie Star, Inc., 361 F. 2d 346 
the employer sought to induce employees to withdraw 
from the union by furnishing them facilities to procure 
signatures and sought to induce them to sign by en- 
gaging in systematic threats to close the plant and to 
discharge employees who remained members of the 
union, if the union was not withdrawn. 

The Board's brief recognizes that it is interference 
with the employees' free choice that is condemned by 
Section 8(a)(1), when they state: "It is a recognized 
form of unlawful interference 'for an employer to . . . 
induce employees to sign . . . any form of union repudiat- 
ing document . . .'" (Emphasis added). Even the Board 
decisions cited involve circumstances which effectively 
deprived the employees of their free choice. Thus, in 
Murray Envelope Corp., 130 NLRB 1574 the employer 
handed employees cards announcing their withdrawal 
from the union, or that they were happy that they had 
never joined, and instructed them to sign and return 
the cards. Also in Lakeland Cement Co., 130 NLRB 
1365 the employer encouraged and assisted an employee 
to personally contact, on company time, other employees 
and obtain their withdrawal from the union. And in 
F. C. Huyck & Sons, 125 NLRB 271 the employer in- 
formed its employees that they could come to him and 
he would assist them in withdrawing from the union. 

Thus, in all of the cases relied on by the Board the 
employer performed acts which clearly coerced and tend- 



—13— 

ed to deprive the employees of their freedom of choice 
as to whether or not to sign. No such facts are present 
here. The Board expressly found that the letter ac- 
companying the post cards, which advised the employees 
of their rights, was privileged and not unlawful. The 
only added ingredient was the presence of the post cards. 
The writing on the post cards was certainly innocuous. 
Nothing related to the mailing of the post cards, or their 
disposition could in any way deprive employees of their 
free choice of action with respect to the post cards or 
their authorization cards. The Board's apparent position 
that the mere furnishing of the post cards, in itself, is 
unlawful interference, even though it does not inter- 
fere with the employees' free choice, is unsupported by 
any authority and as indicated, has been rejected by 
the courts, as in NLRB v. Syracuse Color Press, 209 
F. 2d 596. 

While the Board may believe that the employer's act 
of presenting information to its employees is made more 
effective by enclosing the post card, it cannot, merely be- 
cause it is more effective, declare the conduct illegal. 
This approach by the Board has also been rejected. 
Thus, in Southwire Co. v. NLRB, 383 F. 2d 235 the 
court refused to enforce the Board's finding that the 
employer's showing of the motion picture "And Women 
Must Weep" was a violation of Section 8(a)(1). Al- 
though decided under Section 8(c) rather than 8(a)(1), 
the following statement of the court is highly relevant 
here: "It is true that the film is highly emotional and 
that its impact against unions is probably strong but 
we do not believe that free speech is limited to non- 
emotional or non-impact speech." Just as in Soidhzvire. 
so here, the Deutsch Company's conduct in furnishing 



—14— 

its employees with post cards does not interfere with 
their freedom to select a bargaining agent and cannot 
therefore be a violation of the Act. 

Conclusion. 

For the reasons set forth above, it is respectfully 
submitted that the court should refuse to enforce the 
Board's order. 

Cooper, Tepper & Plant, 
Leon M. Cooper, 
Foster Tepper, 
Attorneys for The Deiitsch Company, 
Electronic Components Division. 



I 

I 



No. 22,753 an^ 22,811 ) 



UNITED STATES COURT OF APPEALS^ ^-=-1969 



FOR THE NINTH CIRCUIT 



National Labor Relations Board, Petitioner 



The Deutsch Company, Electronic Components Division, 

Respondent 



On Petition To Review and Cross-Petition 

for Enforcement of an Order of the 

National Labor Relations Board 



PETITION FOR REHEARING AND SUGGESTION 
FOR REHEARING IN BANC 



Arnold Ordman, 

General Counsel, 

FILED DoMiNiCK L. Manoli, 

Associate General Counsel, 

MAY 9 1969 Marcel MalletPrevost, 

Assistant General Counsel, 

Paul J. Spielberg, 
National Labor Relations Board. 



Wdbh.ngion C THIEL PRESS 202 393 0625 



(i) 

TABLE OF CONTENTS 



AUTHORITIES CITED 

CASES: PAGE 

Atlas Storage Div., P & V Atlas Industrial Center, Inc., 1 12 NLRB 1 175 (1955), 

enfd 233 F.2d 233 (C.A. 7, 1956) 4 

Campbell Soup Co. v. N.L.R.B., 380 F.2d 372 (C.A. 5, 1967) 2 

Eichleay Corp. v. N.L.R.B., 206 F.2d 799 (C.A. 3, 1953) 4, 5 

Fibreboard Corp. v. N.L.R.B., 379 U.S. 203 (1964) 4 

Franks Bros. Co. v. N.L.R.B., 321 U.S. 702 (1944) 4 

I.A.M. V. N.L.R.B., 311 U.S. 72 (1940) 4 

Int'l Ladies Garment Workers Union v. N.L.R.B., 366 U.S. 731 (1961) 4 

Int'l Woodworkers of America, Local 3-10 v. N.L.R.B., 380 F.2d 628 (C.A. 

D.C., 1967) 4 

N.L.R.B. V. Bradford Dyeing Ass'n, 310 U.S. 318 (1940) 4 

N.L.R.B. V. Essex Wire Corp., 245 F.2d 589 (C.A. 9, 1957) 2, 5 

N.L.R.B. V. Falk Corp., 308 U.S. 453 (1940) 4 

N.L.R.B. V. Int'l Union, Progressive Mine Workers, 375 U.S. 396 (1964) 4 

N.L.R.B. V. Mexia Textile Mills, Inc., 339 U.S. 563 (1950) 5 

N.L.R.B. V. Ochoa Fertilizer Corp., 368 U.S. 318 (1961) 5 

N.L.R.B. V. Pennsylvania Greyhound Lines, Inc., 303 U.S. 261 (1938) 4 

N.L.R.B. V. United Aircraft Corp., 324 F.2d 128 (C.A. 2, 1963), cert, den., 

376 U.S. 95 1 (1963) 2 

N.L.R.B. V. Warren Co., 350 U.S. 107 4 

Peyton Packing Co., 49 NLRB 828 (1943), enfd 142 F.2d 1009 (C.A. 5, 

1944), cert, denied, 323 U.S. 730 (1945) 2 

Phelps-Dodge Corp. v. N.L.R.B., 313 U.S. 177 (1941) 4 

Republic Aluminum Co. v. N.L.R.B., 394 F.2d 405 (C.A. 5, 1968) 2 

Republic Aviation Corp. v. N.L.R.B., 324 U.S. 793 (1945) 2 



UNITED STATES COURT OF APPEALS 

FOR THE NINTH CIRCUIT 



Nos. 22,753 & 22,811 



National Labor Relations Board, Petitioner 



The Deutsch Company, Electronic Components Division, 

Respondent 



On Petition To Review and Cross-Petition 

for Enforcement of an Order of the 

National Labor Relations Board 



PETITION FOR REHEARING AND SUGGESTION 
FOR REHEARING IN BANC 



The National Labor Relations Board respectfully petitions the Court 
to grant rehearing, and suggests rehearing in banc, of the decision entered 
in this case on April 8, 1969. In that decision a panel of the Court 
(Circuit Judges Chambers and Koelsch, and District Judge Von Der Heydt) 
held that the violations found by the Board were too "trivial" to warrant 
enforcement of the Board's remedial order. We submit that such discount- 
ing of the unfair labor practices found here is unjustified, and that the 
Court's refusal to enforce the Board order exceeds the established limits 



of judicial review of Board orders and is inconsistent with decisions of this 
and other courts of appeals. 

1. It is an unfair labor practice for an employer to prohibit his em- 
ployees from soliciting union membership or distributing union literature 
on their free time and in nonwork areas, unless "special circumstances 
make the rule necessary in order to maintain production or discipline." 
Republic Aviation Corp. v. N.L.R.B., 324 U.S. 793, 803, n. 10 (1945), 
quoting from Peyton Packing Co., 49 NLRB 828, 843-844, enforced 142 
F.2d 1009, 1010 (C.A. 5, 1945), cert, denied, 323 U.S. 730.' Beyond 
dispute, the Company maintains and enforces a rule forbidding employees 
from soliciting for a union or passing out union literature on Company 
property (except in one parking lot) at any time. Thus, since 1962 a rule 
in the Company's orientation booklet has prohibited "the solicitation of 
membership in organizations during working hours on Company property" 
(R. 21; Exh. 2). After the Union's current organizing campaign began, 
several employees received written warnings when, prior to the commence- 
ment of work, they attempted to pass out union authorization cards while 
standing just inside a plant gate.^ About the same time, two employees 
who distributed authorization cards in the plant lunchroom during their 
respective lunch periods received three-day disciplinary layoffs (R. 29; Tr. 
79-83, 119-121, 205-208, 225-226, 250-252). The Board found that the 



^Accord: N.L.R.B. v. Essex Wire Corp., 245 F.2d 589, 593 (C.A. 9, 1957); 
Republic Aluminum Co. v. N.L.R.B., 394 F.2d 405 (C.A. 5, 1968) {in banc); Campbell 
Soup Co. V. N.L.R.B., 380 F.2d 372, 373 (C.A. 5, 1967); N.L.R.B. v. United Aircraft 
Corp., 324 P. 2d 128, 130-131 (C.A. 2, 1963), cert, den., 376 U.S. 951. 

^The warning stated: "It is forbidden to hand out Union literature within 
the Deutsch plant during working hours or rest periods" (emphasis supplied), and 
threatened the employees with discharge for "continued infractions" of the rule. 
A similar notice was posted on the plant bulletin board (R. 29; Tr. 82-84, 1 17-118). 



Company had failed to show a legitimate reason for its total ban on union 
activity in the plant (R. 13-14).-'' The Board therefore concluded that 
the Company's no-solicitation and no-distribution rules violated Section 
8(a)(1) of the Act and that the disciplinary suspension given two employ- 
ees violated Section 8(a)(3)/ The Board issued a conventional order 
directing the Company to cease and desist from the violations found, 
including "maintaining and enforcing an unlawful broad rule prohibiting 
solicitation and distribution of literature on behalf of the Union during 
nonworking time in nonworking areas of the plant" (R. 32). 

2. We submit that on no permissible scale of evaluation can the vio- 
lations herein be deemed too minimal to warrant relief.-^ This is not 
a case of an isolated and completed act of misconduct. The Company's 
rule, actively enforced, is a continuing bar against employees engaging in 
union activity in lunch rooms, rest areas, and elsewhere in the plant on 
their own time. The cease and desist order is not only appropriate but 
essential to effectuate the statutory policy to protect union activity at the 
employees' place of work, consistent with the employer's reasonable needs. 



According to the Company, the distribution of Union literature in the vicinity 
of the plant gates might cause congestion and hinder the checking of badges by guards. 
The Board noted, however, that traffic at the gates never exceeded ten employees 
a minute and that this reason was never mentioned to the employees. The Board also 
rejected the Company's explanation for banning the distribution of authorization cards 
in its lunchrooms— that its guards might see the cards in the employees' lunch boxes 
during a gate check— noting that such inadvertent discovery of union material "would 
not be considered an unfair labor practice" (R. 29). 

"^The Board also found that the Company violated Section 8(a)(1) by giving its 
employees improper assistance in the revocation of executed authorization cards 
(R. 29-31). 

■^The Company has never contended that, if its conduct was violative of the Act, 
it was too trivial to justify the Board's remedial order. 



3. By refusing to enforce this order, the panel has patently over- 
stepped the bounds of the reviewing authority conferred by the Act. As 
the Supreme Court has repeatedly admonished, "the relation of remedy to 
policy is peculiarly a matter for administrative competence land] courts 
must not enter the allowable area of the Board's discretion." Phelps- 
Dodge Corp. V. N.L.R.B., 313 U.S. 177. 194 (1941).'^ It is for the Board, 
once it has found that unfair labor practices have been committed, to 
determine whether effectuation of the statutory policies requires the issu- 
ance of a remedial order barring such practices. '^ Indeed, at least two 
circuits have held that the Act requires the Board to issue a cease and 
desist order once it has determined that a person has committed unfair 
labor practices.^ But, whatever the allowable limits of the Board's discre- 
tion in this area, once it determines a remedy is necessary and orders "an 
appropriate remedy, a like obedience to the statutory law on the part of 
the Court of Appeals requires the court to grant enforcement of the 
Board's order" where, as here, the Board's unfair labor practice findings 
are clearly supported by the record. N.L.R.B. v. Bradford Dyeing Ass'n, 
310 U.S. 318, 343 (1940).^ The Court's scope of review is even "more 

"^Accord: N.L.R.B. v. Pennsylvania Greyhound Lines, 303 U.S. 261, 271 (1938); 
I. A.M. V. N.L.R.B., 311 U.S. 72, 82 (1940); N.L.R.B. v. Falk Corp., 308 U.S. 453,461 
(1940); Franks Bros. v. N.L.R.B., 321 U.S. 702, 704 (1944); I nt 'I Ladies Garment 
Workers' Union v. N.L.R.B., 366 U.S. 731, 735, 736, 739-740 (1961); Fibreboard 
Corp V. N.L.R.B., 379 U.S. 203, 216 (1963). 

^See e.g., Adas Storage Division, P & V Atlas Industrial Center, Inc., 1 12 NLRB 
1175, 1180 (1955), enforced sub nom., Chauffeurs, Teamsters, etc.. Local 200 v. 
N.L.R.B., 233 F.2d 233 (C.A. 7, 1956) (no order necessary to remedy an isolated 
threat against one employee in a large unit). 

^Int'l Woodworkers of America, Local 3-10 v. N.L.R.B., 380 F.2d 628, 630-631 
(C.A. D.C., 1967); Eichleay Corp v. N.L.R.B., 206 F.2d 799, 805 (C.A. 3, 1953). 

^Accord: N.L.R.B. v. Int'l Union, Progressive Mine Workers, 375 U.S. 396 
(1964), summarily reversing 319 F.2d 428 (C.A. 7); see N.L.R.B. v. Warren Co., Inc., 



limited" witii respect to a "simple cease and desist order," for "whatever 
may be the broader policies of the Act, the compelling policy which we 
may not thwart is the Congressional determination that certain acts are 
illegal and must be enjoined." Eichleay Corp. v. N.L.R.B., supra, 206 
F.2d at 805. 

4. The panel's decision is also contrary/ to this Court's decision in 
N.LR.B. V. Essex Wire Corp., supra, 245 F.2d 589. There, as here, the 
employer maintained an unlawful broad no-solicitation rule which pro- 
hibited, inter alia, union solicitation during employees' rest periods. ^^ 
Unlike the case at bar, the Essex employer expressly contended that the 
incidents charged against it, even if unlawful, were "isolated and sporadic," 
so that "issuance of a cease and desist order [was] nevertheless unwar- 
ranted", supra, at 593. Rejecting this contention, the Court observed that 
"the incidents, while few in number, involved more than isolated and 
chance remarks, interrogations, or warnings later repudiated and never 
enforced" (supra, at 594). The Court acknowledged that "the Company's 
basic policy with respect to such union activity" may have been "fair and 
proper" but held that "the criticized practices were of a nature which war- 
ranted the Board in characterizing them as unlawful and in ordering that 
respondent cease and desist" (ibid. ). 



350 U.S. 107, 112 ("where the Board has acted properly within its designated sphere, 
the Court is required to grant enforcement of the Board's order"); see also, N.L.R.B. 
V. Alexia Textile Mills, Inc., 339 U.S. 563, 567-568 (1950); cf. N.L.R.B. v. Ochoa 
Fertilizer Corp., 368 U.S. 318, 322 (1961). 

The Board found as separate 8(a)(1) violations incidents wherein supervisors 
ordered one employee to surrender signed authorization cards in his possession {supra, 
at 592), and ordered another to remove her union button {supra, at 591, 593). 



CONCLUSION 

For these reasons, the case should be reheard, either by the panel, or 
in banc, and, after such rehearing, a decree should be entered enforcing 
the Board's order. 



Respectfully submitted, 

ARNOLD ORDMAN, 

General Counsel, 

DOMINICK L MANOLL 

Associate General Counsel, 

MARCEL MALLET- PREVOST, 

Assistant General Counsel, 

PAUL J. SPIELBERG, 

Attorney, 

National Labor Relations Board. 



May 1969.